



i iftii 



THE 
ECONOMIC CAUSES OF MODERN WAR 

A STUDY OF THE PERIOD: 1878-1918 



OTilUamsi College 

DAVID A. WELLS PRIZE ESSAYS 



Mnmhtx 6 

THE ECONOMIC CAUSES 
OF MODERN WAR 

A STUDY OF THE PERIOD: 1878-1918 



BY 



JOHN BAKELESS, M. A. 




PRINTED FOR THE 

DEPARTMENT OF POLITICAL SCIENCE 

OF WILLIAMS COLLEGE 

5ij> Moiiat, |9arb anb Company, ^eto fSorfe 

1921 



^^\^.5 



COPYBIGHT, 1931, BT 

MOFFAT, YARD & COMPANY 



« C iOv 



SLP 'S^^^^ 



PRINTED IN THE IT. S. A. 



0)CI,A627132 



TO 

KATHERINE LITTLE BAKELESS 



INTRODUCTION 

The present volume is an effort to trace the chain of 
economic causes which produce modern wars. It is an 
effort also to show that the same series of causes, at the 
same time that they bring about wars, are working (some- 
what less effectively) towards increasing international soli- 
darity. And finally, it is a very modest attempt to indicate, 
tentatively, the general lines on which the operation of these 
economic causes in the first direction may be limited and 
in the second forwarded. 

Originally it was a study only of the economic causes of 
war; but as the research progressed it speedily became ap- 
parent that there was another side to the picture. By an 
ironic paradox the same forces were producing two effects: 
they were working toward war and peace at the same time. 

The rise of industrialism has led to a struggle for markets 
and for food supplies and raw materials. These have led 
to international friction culminating in war, mainly through 
questions of colonial policy. But since industrialism and 
colonial expansion are impossible without a high degree of 
financial inter-relationship among nations, and since the 
interest of the financier is usually (but not by any means 
always) in the preservation of peace for the sake of his in- 
vestments' safety, the forces that generate wars also gen- 
erate a force which tends to prevent them. Moreover, the 
extreme complexity of these inter-relationships between 
modern industrial states, through the need for international 
transportation, communication, standardization of weights 
and measures, publication of tariffs, and the like, has bred a 



viii Introduction 

spirit of co-operation among nations which is opposed to the 
war spirit. 

But it is quite apparent that as matters have stood hither- 
to, the economic causes are working a good deal faster 
towards war than peace. The ratio of four peaceful years 
to thirty-nsix years of war during the period 1878-1918 
scarcely indicates that the war god is going out of business 
immediately. It is for this reason that I have stressed the 
causation of war, rather than its prevention ; and have tried 
only in the concluding chapter to indicate very briefly 
where the most promising remedy lies. For those who are 
familiar with their writings, my debt to Mr. J. L. Garvin 
of the London Observer and to Mr. H. N. Brailsford will be 
too obvious to need the acknowledgment that I make most 
gratefully. 

The three quotations prefixed to the text serve to indicate 
pretty accurately in advance the approach to the subject. 
There is here no effort to advance a purely "economic theory 
of history"; there is, however, an attempt to demonstrate 
that the root of modern war lies in economic conditions, 
even though other causes are sometimes operative to a less 
extent. There is also a constant effort to strip off the dis- 
guises which purely economic motives are likely to assume. 

The study was begun while I was still in military service 
at Camp Lee, Virginia. The duties of a battalion adjutant 
having proved scarcely conducive to research, it was laid 
aside and resumed some months later, after which it was 
presented in skeletal form before the Seminar in the Phi- 
losophy of History at Harvard. As a result of the criticisms 
received there, several changes were made, and the subse- 
quent revision has led to the introduction of much additional 
data. 

The manuscript has been read by Professor William 
Ernest Hocking, of Harvard University, by Professor Walter 



Introduction ix 

Wallace McLaren and Dr. James Washington Bell, of 
Williams College, and by Mr. Lennox Mills, Rhodes Scholar 
from British Columbia, greatly to its benefit and my own. 
I owe to the Reverend Father Campbell, of the Society of 
St. John the Evangelist, first hand information relative to 
conditions in the Far East; to Dean J. H. Latane, of Johns 
Hopkins University, and to Professor I. W. Howerth, of 
the University of California, assistance in locating refer- 
ences; to Dean Le Baron Russell Briggs, of Harvard LTni- 
versity, aid in the revision of manuscript; and to Colonel 
James B. Gowen, Executive Officer, General Staff College, 
United States Army, the compilation of the list of wars 
on page 46. 

Although I am greatly indebted to these gentlemen for 
many suggestions of the greatest value, the responsibility 
both for statements of fact and for conclusions is, of course, 
entirely my own. 

John Bakeless. 
Cambridge, Massachusetts, 
26 October, 1920. 



CONTENTS 

CHAPTER PAGE 

Inteoduction . . vii 

I. The Causes of Wars 1 

II. The Economic Motives of Colonial Rivalry . 14 

III. The Economic Motives of the Wars of the 

World: 1878-1914 38 

IV. The Economic Motives of the World War: 

1914-1918 141 

V. The Prevention of War by International 

Finance 177 

VI. Internationalism and Economic Conflict . . 196 

VII. The League of Nations 212 

Bibliography 231 

Index 250 



THE 
ECONOMIC CAUSES OF MODERN WAR 

A STUDY OF THE PERIOD: 1878-1918 



"The potent pressure of economic expansion is the motive 
force in an international struggle." 

— H. N. Brailsfged. 



"The desire for commercial privilege and for freedom from 
commercial restraint is the primary cause of war." 

— J. A. HOBSON. 



"Economic interpretation of history means, not that the 
economic relations assert an exclusive influence, but that they 
assert a preponderant influence in shaping the progress of society." 

— E. R. A. Seligman. 



THE ECONOMIC CAUSES 

OF 

MODERN WAR 



CHAPTER I 



THE CAUSES OF WARS 



Sharp distinction is always to be drawn between the real 
and the apparent occasions of wars. The real, as contrasted 
with the ostensible causes, are not often clear and can seldom 
be entirely understood. No international conflict was ever 
due to a single cause, but all have been rather the result of a 
group of causes, of which only a few have ever become 
apparent. 

Nor are the incidents which precipitate wars likely to be 
anything more than sparks, igniting magazmes already 
primed for explosion. A dispute with regard to a pig is 
said at one time to have threatened war between the United 
States and Great Britain, and on another occasion between 
France and the Republic of Texas, then independent of the 
United States.^ Difficulties between Vienna and Belgrade 
over the export of Serbian pigs had much to do with the 
bitterness which culminated in the Sarajevo murder and 
the World War. The cutting off by Spaniards of the ear 
of an English sea captain named Jenkms was the imme- 
diate cause of the war of 1738 between England and Spain, 

'I. W. Howerth: "The Causes of War," Scientific Monthly, 2:118:F '16. 
See also D. W. C. Baker: A Texas Scrap-Book, p. 315. 

1 



2 The Economic Causes of Modern War 

which later became part of the War of the Austrian Succes- 
sion, but which was first known as "Jenkins's Ear War." ^ 
Some of the fiercest fighting of the ■ Nineteenth Century 
occurred during the war between Peru and Chile, which 
followed a dispute over manure. The blowing up of the 
battleship "Maine" in Havana harbor could never have 
produced war between the United States and Spain had not 
the two states been prepared for hostilities by a variety of 
economic, idealistic, and humanitarian motives. Nor could 
Bismarck's alteration of the Ems telegram have brought 
about the Franco-Prussian War had not both countries 
been already upon the verge of a conflict, from a number of 
causes of varying natures, dynastic, nationalistic, economic, 
and territorial. In all these cases, the incidents, tragic or 
grotesque, to which the wars that followed have been directly 
due, are evidently in no real sense the actual causes. For 
them, one must look deeper and further back in history. 

Religious differences; dynastic ambitions; efforts to 
divert popular attention from domestic strife; "altruistic" 
motives for the spread of a superior culture; the defense of 
neutral rights; compliance with the terms of alliances; 
efforts at national unification; struggles for national inde- 
pendence; aid extended to rebels; ambition for hegemony 
in the family of nations; affronts, real and fancied, to the 
national honor; revenge, distrust, hatred, or mere misunder- 
standings between nations, leading to increased armaments, 
and culminating in "defensive" onslaughts upon one an- 
other; the chauvinism of professional military or naval 
castes; plotting against the peace and security of neighbor- 
ing states; and finally, a wide variety of economic motives, 
over-population, immigration and emigration with their 
attendant international friction, territorial expansion, colo- 

* Edward P. Cheyney: Short History of England, p. 557. 



The Causes of Wars 3 

nies, trade rivalries, the needs of industrial states for mar- 
kets, raw materials, and food supplies, security for vital 
arteries of trade, access to the sea, "scientific" frontiers, and 
the possession of strategic points — all these have been im- 
portant causes of wars at one time or another. Although 
certain of them seem more important at present, almost any 
one can be found in some form or other, usually not very 
thoroughly disguised, in the great war which has just come 
to an end. 

In the kingless and apparently godless world of 1920, 
it is difi&cult to believe that either dynastic or religious 
considerations could really produce wars; yet it is but a 
few years since the divine right of kings was being pro- 
claimed in all seriousness, and since Russian, Austrian, and 
German troops were marching in the names of gods as 
truly tribal as Allah and Yahweh ever were, to support 
the threatened Romanoff, Hapsburg, and HohenzoUern 
dynasties. During the same period, the Jehad, or Holy War, 
was proclaimed in the Moslem world ; and although General 
Allenby's campaign in Palestine can hardly be called a 
Holy War, there is no denying that a strong religious 
interest attached to it throughout the Christian world. ^ 

^ In 1866 Lecky regarded religious difficulties as a group of war causes 
soon to become obsolete, for he wrote: "The great raajority of wars 
during the last 1,000 years may be classified under three heads — wars pro- 
duced by opposition of religious belief, wars resulting from erroneous eco- 
nomical notions, either concerning the balance of trade or the material 
advantages of conquest, and wars resulting from the collision of the two 
hostile doctrines of the Divine right of kings and the rights of nations. In 
the first instance knowledge has gained a decisive, and in the second almost 
a decisive victory. Whether it will ever render equally impossible political 
combinations that outrage national sentiment is one of the great problems 
of the future." — Lecky: Rationalism in Europe, vol. ii, pp. 219-220. 

The history of the last fifty years renders his error as to the economic 
factor so glaringly obvious that one is inclined to question the accuracy 
of his conclusion as to the "decisive victory" which knowledge has gained 
over religious hostilities. The civil war in Ireland is a case in point. 



4 The Economic Causes of Modern War 

We must go further back in history to find wars which 
have been fought with the religious motive well to the front, 
but in all times and in all religions we find them. The Old 
Testament teems with religious wars, Mohammedanism 
has spread itself over half the world with the sword for 

Mr. Oscar T. Crosby, President of the World Federation League, a 
graduate of the United States Military Academy, who was for five years 
a lieutenant of engineers in the United States Army, points to the com- 
plex intermingling of faiths on both sides in the World War, as preclud- 
ing the entrance of the religious motive. (International War, Its Causes 
and Its Cure, p. 230.) His religious tabulation of the warring powers, 
slightly enlarged, is as follows: 

Allied Powers 

British Empire — Protestant, Roman Catholic, Anglican Catholic, Ag- 
nostic, Hindu, Mohammedan, Parsee, Buddhist, Jaina, Animist, Jewish, 
Agnostic. 

France — Roman Catholic, Agnostic, Protestant, Mohammedan, Buddhist, 
Confucian, Animist, Jewish. 

Russia — Greek Catholic, Protestant, Mohammedan, Buddhist, Armenian, 
Jewish. 

Italy — Roman Catholic, Agnostic, Jewish. 

Japan — Buddhist, Shinto, Christian (of diverse shades), Agnostic. 

America — Protestant, Anglican Catholic, Roman Catholic, Greek Cath- 
olic, Jewish, Mohammedan, Agnostic. 

Serbia — Greek Catholic. 

Central Powers 

Germany — Protestant, Roman Catholic, Agnostic, Jewish, Buddhist. 

Austria — Roman Catholic, Protestant, Agnostic, Jewish. 

Turkey — Mohammedan, Armenian, Jewish. 

Bulgaria — Greek Catholic, Jewish. 

The religious motive is no doubt of minor importance in the wars 
of the modern world, but the well-known fact that the German General 
Staff deliberately counted on a Mohammedan Holy War, together with 
the other facts that I have given, serves to show that it is not dead by 
any means. So astute an observer of international events as Dr. E. J. 
Dillon remarks: "It is a fact — not yet realized even by the delegates 
themselves — that distinctly religious motives inspired much that was done 
by the Conference on what seemed political or social grounds." (The In- 
side Story of the Peace Conference, p. 489.) Although Dr. Dillon later 
(p. 496) regards "the plea that war may be provoked by such religious 
inequality as still survives" as "unreal" it is evident that — however "re- 
ligious inequality" may be considered) — a force which is still so vital as 
"religious motives" were at Paris, is seriously to be reckoned with. 



The Causes of Wars 5 

missionary, Christianity itself did not disdain to go crusad- 
ing, and the history of Europe is filled with the battles of 
Catholic and Protestant. 

The clearest modern instance of a series of wars resulting 
primarily from dynastic ambitions, is to be seen at the 
beginning of the Nineteenth Century, in the Napoleonic 
Wars. Although even here we do not have a case of wars 
produced solely by dynastic ambition (for there were, of 
course, other causes), we have at least an example of an 
ambitious ruler, would-be founder of a dynasty, thirsty for 
power, deliberately embroiling Europe for a period of many 
years, for the sake of gratifying his own ambitions. 

Not only may a ruler who regards the interests of his 
dynasty as paramount engage in a war to enhance its 
prestige, or to enlarge its domains; but he may also find 
in war a convenient means of solidifying its power at home 
by diverting popular attention from domestic difficulties. 
The unanimity with which the widely diverging parties of 
the German Empire, from Junker to Socialist, jomed in 
1914 for the period of the war, is a case in point. Nor is 
warfare as a means of promoting harmony within the state 
unknown even to republics. Immediately prior to the 
outbreak of the American Civil War, Secretary Seward and 
his followers are said to have been casting about for a for- 
eign war as the most convenient means of allaying the grow- 
ing discord between North and South. ^ Only in the union 
before a common foe resulting from the Spanish-American 
War did sectional hostility in the United States finally 
vanish. 

To talk of an "altruistic" war seems almost a contra- 
diction in terms, and yet there can be no question that 
France in the days of the First Republic was ready to carry 

^ 0. T. Crosby : International War, Its Causes and Its Cure, p. 335. 



6 The Economic Causes of Modern War \ 

the gospel of "Liberie, egalite, fratemite," to an unwillm,^ 
world by force of arms, just as in the recent war our German 
adversaries went forth with the avowed intention of bestow- 
ing upon a benighted globe the inestimable advantages of 
a superior Kultur. 

Phrases like "the white man's burden," — which, as we 
shall presently see, is a highly profitable load — are efforts 
to cast the cloak of altruism over the stark economic 
motivation of European colonial conflicts. England in 
Egypt and Africa, the United States in the Philippines, 
Italy in Tripoli, France in Tunis, Algiers, Morocco, and 
Indo-China, insist that they are altruistically and with 
sublime self-abnegation doing their share in caring for the 

". . . new-caught, sullen peoples, 
Half-devil and half-child." 

War also assumes an ethical aspect when the warring 
powers profess to be engaged in a struggle on behalf of 
the rights of neutrals, as was the case when the United 
States went to war with Great Britain in 1812 in defense 
of neutral rights at sea, or when in 1914 Belgium struck in 
defense of her neutrality, or Great Britain (partly) in 
defense of the same neutrality. But Great Britain, in 
addition to the enormously important economic motives 
to be discussed later, was also engaged by alliance to uphold 
Belgian neutrality, one of the numerous examples afforded 
by the World War of compliance with the terms of an 
existing alliance as an occasion, though not a true cause, 
of war. 

What appears to be an innate human tendency to group 
in increasingly large units, has contributed its share to the 
wars of the world. The ancient world grouped and re- 
grouped itself, at the price of endless warfare, again and 
again, as Assyrian, Babylonian, and Egyptian Empires rose 



The Causes of Wars 7 

and fell. Out of the large unit which was the Roman 
Empire came the grouping and regrouping of the Holy 
Roman Empire. 

The last century has seen the unification of the German 
Empire, the unification of Italy, and the settling, once for 
all, of the question of the unity of the United States. 
Sometimes such processes of national unification can be 
brought about by agreement. More often, in the past, 
unification has come through war. It was the wars of 
1864, 1866, and 1870 that made possible the union of the 
scattered German states; it was through battle that a United 
Italy came together; and it was only after four years of 
bitter warfare that our own country became forever a 
united land. 

Colonies and dependencies, and even countries which are 
merely political associates, can usually become free and 
independent states only by appeal to arms. The peaceful 
separation of Sweden and Norway was a most unusual 
incident. Every Republic in North and South America won 
its freedom with the blood of its citizens. Greece, Serbia, 
Bulgaria, Montenegro, Roumania, have one by one cast off 
the yoke of Turkish suzerainty through war. Because the 
desire for national independence leads to conflict, we have 
within the last three years seen one small state after another 
split from the empire of which it had hitherto been a part, 
and with an army in the field assert its right to an inde- 
pendent existence. 

When a subject nation is thus engaged in a war for 
independence, other powers, already hostile to its suzerain 
from a variety of reasons, may make use of the occasion to 
come to the assistance of the rebels, paying off old scores 
under the convenient cloak of idealism. Thus it was that 
France sent troops to the aid of the rebellious American 
colonies of her traditional foe. Great Britain; and both in 



8 The Economic Causes of Modern War 

European and South American countries the United States 
has been credited with a similarly Machiavellian policy in 
the Cuban intervention. 

The rise and fall of German hegemony in Europe, com- 
prised within the period 1862-1918,^ furnished an excellent 
example of a series of wars fought for the sake of the leader- 
ship of one nation among the rest. Under Bismarck's adroit 
statecraft, the war of 1864 aggrandized Prussia at the 
expense of Denmark, and furnished the spark which, judi- 
ciously fanned, burst into flame in the war with Austria in 
1866. With the defeat of Austria, Prussia won the hege- 
mony among the scattered German states, and after that, 
by the defeat of France in the Franco-Prussian War, the 
hegemony of Europe. Since then a series of threats, demon- 
strations, diplomatic crises, and war scares have gone to the 
maintenance of that hard-won hegemony, culminating at 
last in the grand debacle of the present war and the dis- 
appearance of German leadership. 

The desire to maintain the hegemony of a nation leads 
its statesmen to be highly sensitive when that extremely 
nebulous quantity known as the "national honor" is in- 
volved, and to be ready to threaten war over incidents 
trifling in themselves, but regarded as tending to belittle 
the prestige of the nation and to open the way to further 
and more serious infringements of its dignity by the offend- 
ing nation. A case in point is the scuffle at Casablanca in 
which a German consul's cane was broken. That broken 
cane very nearly brought all Europe into war. 

Mutual hatred or the desire for revenge between nations 
is another potent cause of war. The forty years of sus- 
picion between France and Germany, the policy of 

^ From Bismarck's accession in 1862 to the office of Chancellor to the 
King of Prussia, to the signing of the armistice which ended the World 
War in 1918. 



The Causes of Wars 9 

"revanche/' the rankUng wound of the economic and senti- 
mental loss of Alsace-Lorraine, have all but produced war 
again and again and again. The distrust of Germany which 
implanted itself in the English mind between 1890 and 
1914, and the growing dislike and jealousy of England 
which made itself apparent a little before, if not quite 
simultaneously, in Germany, served to open the way for 
hostilities. 

Of the numerous causes from which such national dis- 
trusts may grow, the most prolific is the sheer difficulty of 
one nation in understanding another. The mere barrier 
of language, where it exists, is in itself a contributing cause, 
since there is no opportunity for the two peoples to know 
and understand each other. Where this barrier does not 
exist, there is unfortunately, an appalling opportunity for 
friction through differences of custom, habits, manner of life, 
all of which may in the end lead to bitterness because of the 
very fact that through community of language, adverse 
utterances in the journals of one nation are readily com- 
prehended and copied by those of the other. 

Where international hatred, distrust, or jealousy exists, 
the national armament is certain to be increased. It was in 
obedience to this law that France fortified her northern 
frontier, that England added continually to her fleet, and 
that the work of the German Flottenverein resulted in the 
building of the one fleet capable of rivalling that of Great 
Britain. Likewise, where these national jealousies exist, a 
professional military caste is almost certain to spring up, 
its whole life given to preparation for war — a caste always 
on the lookout for war (with which its whole prospect of 
preferment is bound up), favoring war, and quite capable 
of indiscretions which may bring it about. Such was the 
case in Germany prior to 1914; such was the case to a much 



10 The Economic Causes of Modem War 

less degree in France; such was the case to some degree in 
the British fleet. 

National jealousies and hatreds, with the perpetual virus 
of a military or naval hierarchy, even if the last be not all- 
powerful, distrust and suspicion between the nations in- 
volved, have as their results constant uneasiness and ever- 
growing tension of the national nerves. This ends in 
ultimatums, war-scares, and "defensive attacks" to take 
advantage of speedier mobilization — all, sometimes, over 
disagreements which were trifling in their origin, or at least 
capable of peaceful solution, but which have at last bred 
terrific conflicts. 

All this leads naturally to what has always been one of 
the chief reasons for warfare — the economic. From the 
earliest days, when primitive tribes fought one another for 
hunting grounds, for slaves, or for loot, economic considera- 
tions have been involved in war. Economics and finance 
do not merely enter into the provocation of modern war, 
but are themselves among the means by which it is carried 
on. The blockade is a device which was long ago discovered, 
but today trade and tariff wars precede the use of force, and 
economic pressure helps to force the enemy into submission. 

That economic conditions have stimulated war in all ages 
is a commonplace of history. The great mercantile powers 
of the world have always fought one another, whether for 
markets, over trade routes, or out of the sheer bitterness 
engendered of their commercial contests. But it has re- 
mained for the economic foes of our day to penetrate 
into the furthermost comers of the earth with quarrels and 
bickerings which have in the end been productive of the 
bloodiest of wars, to carry "civilization" — and the surplus 
products of their industries — throughout the world, merci- 
lessly crushing the unfortunate natives that have stood in 
their way, and in the end coming into armed conflicts with 



The Causes of Wars 11 

one another because of the demand of each for more and 
yet more opportunity for economic expansion. 

Without going to the extremes of the out-and-out expo- 
nents of the economic theory of history, one may say with 
safety that there has never been a war into which economics 
did not enter to some degree, and that there has seldom 
been a war into which economics did not enter to a great 
degree. 

Pressure of population has always been a potent cause 
of wars. It was this that sent the Goth and Hun south 
to the Mediterranean as the Roman Empire tottered to its 
fall — the pressure of other populations, behind them, press- 
ing out of Asia. It is this that has caused modern wars. A 
fecund nation grows so rapidly that it has no longer room 
within its borders for its citizens. Then comes either emi- 
gration, with its consequent loss to the state of its citizens, 
or else expansion into the domains of a neighboring state. 
Encroachment upon another's territories means war, inevi- 
tably. Colonization means war, too, either with other 
colonizing powers, or with the natives whom the new set- 
tlers displace. 

As the states of Europe have grown in population beyond 
the capacity of their own soil to feed them, they have turned 
from agriculture to industry. They have had to look beyond 
their borders for food for their populations, for raw mate- 
rials for their industries, and for markets for their wares. 
They have required access to the sea, and strategic points 
along the trade routes by which these things are brought 
to them. 

It is the increase of population, followed by the rise 
of industrialism, and the consequent economic interde- 
pendence in vital commodities without guaranties of eco- 
nomic security save by force, that have rendered war inevi- 



12 The Economic Causes of Modern War 

table in the modern world. The imperative need of food 
supplies, of raw materials, of markets, and the insecurity of 
a world organization which makes it possible for any of 
these to be cut off at any moment by a hostile fleet or 
army, lead to a frantic effort for the acquisition of~the 
portions of the earth where raw materials and food supplies 
are to be had, as well as to the quest of colonies as pros- 
pective consumers of the wares produced by the father- 
land in excess of its own (and general European) consump- 
tion. 

This is the situation which stimulates the trade rivalries 
that serve to embitter national quarrels already existing 
for other reasons. Witness the increasing national hatred 
between Great Britain and Germany, which grew apace as 
German enterprise and scientific methods gradually dis- 
placed the British in the markets of the world. Out of 
trade rivalry comes colonial rivalry, colonial wars waged 
by the mother countries for the possession and safeguarding 
of their domains, and in the end, wars between the great 
colonial powers themselves because of quarrels engendered 
in their colonies. Witness Fashoda, witness Agadir, and 
witness the whole miserable business of the Far and Near 
East. 

The chapters that follow are an effort: 

First, to trace the economic forces that have driven Euro- 
pean nations into constant collision with native tribes and 
with one another in the backward lands of the earth — 
primarily overpopulation, followed by manufacturing 
beyond their own capacity to use, with resultant shortage 
of food supplies and raw materials; 

Second, to examine the actual working in history of this 
theoretical chain of war causes, by a study of the origins 
of the wars of the period 1878-1918; 



The Causes of Wars 13 

Third, to set forth the paradox by which international 
finance both produces and prevents wars; 

Fourth, to show the way in which the economic causes 
of wars affect internationalism, and their relation to the 
League of Nations. 



CHAPTER II 

THE ECONOMIC MOTIVES OF COLONIAL RIVALRY 

Ever since states began, they have founded colonies, 
although the objects and methods of the colonization have 
radically differed, as has the status of the colonies in rela- 
tion to the parent nations. Ancient Greek colonization, for 
example, was a very different process in every respect from 
the colonization of our own day, for the Greeks — to whom 
the state was necessarily a city — regarded it as being natur- 
ally a small organization, and drew the obvious inference 
that the surplus population was to be accommodated only 
by the founding of a new state. Hence the classic colony 
consisted of a body of emigrants from the parent state, who 
withdrew from it and went elsewhere to set up a new ttoKls 
which should carry on the traditions, customs, ideals, habits 
of life of the old state, but without any political connection. 
Thus were founded all the colonies which dotted the 
shores of the ^gean; and thus it was that Carthage grew 
from Phoenicia. 

This was the earliest and most natural method of coloniza- 
tion, but it was not the only one; nor was it — especially 
as means of communication gradually improved — the only 
natural one, for to the bonds of blood, customs, and religion 
could well be added that of political connection. A proto- 
type of the classic colonizing tradition is the city of Miletus, 
with her daughter cities flourishing all about her; and of 
the modern tradition, the British Empire, which has grown 
gradually but surely through the centuries by the most suc- 
cessful application that the world has yet seen, of the more 
modern method. 

14 



The Economic Motives of Colonial Rivalry 15 

A change, then, has come over the methods of founding 
and administering colonies, and it is a change which has 
grown directly out of the increasing complexity of modern 
civilization. Not only has there been a change in methods, 
but new motives also have come to make themselves felt. 

The most important, and mdeed the fundamental cause 
of the demand for colonies is the growth of the populations 
of European states beyond the capacities of the territories 
of the various nations to support them. Throughout the 
entire continent an increase of population has been going 
on, in some countries more rapidly than in others, but in 
almost all fast enough to cause the numbers of the popula- 
tion to exceed by far the productive capacity of their own 
land. The population of Prussia would double itself by 
natural increase in 49.2 years; that of England in 59.1 
years; that of Italy in 65.7 years; that of Austria in 74.1; 
and — though the population of France lags behind — even 
there in a period of 591 years a similar increase would 
result.^ 

Evidently a constantly increasing pressure on the means 
of subsistence must follow in all nations ; nor is the pressure 
upon the other European states relieved, nor the colonial 
or military rivalry lessened, by the slow rate of increase 
in a single nation. By a paradox, the political effects of a 
rising birth rate in Germany and a falling birth rate in 
France have been precisely the same; for Germany, like 
every other European Power, has believed herself compelled 
to seek an outlet for population in a world empire; and 
France has been forced to look to new colonies for the native 
troops with which to meet the long-expected onslaught of 

* A. Newsholme : The Elements oj Vital Statistics, p. 15. Professor F. W. 
Taussig gives slightly different figures: 59 years for England and Wales; 65 
years for Italy; but 990 years for France. {Principles of Economics, vol. 
ii: p. 215.) 



16 The Economic Causes of Modern War 

her more fecund neighbor.^ In each case the practical 
result has been identical — a demand for colonies, conse- 
quent rivalry with other Powers having the same ends in 
view, jealousy, and friction because the lands available 
for European colonization are limited. 

The German efforts to build up a world empire during the 
latter part of the Nineteenth and the first part of the 
Twentieth Centuries offer the clearest example of the forces 
which have been at work throughout Europe generally, — 
though not everywhere so clearly. 

The characteristic fecundity of the Teuton has been one 
of the most important causes of the German demand for 
colonial expansion. Although the German birth rate has 
been falling since 1876 when it stood at 41.0 per 1,000 of 
the population of the whole Empire, the death rate has 
been falling, too ; and this, together with state and municipal 
efforts to check infant mortality has kept the population 
constantly increasing. Within a hundred years it has 
tripled, and 6,000,000 Germans have come to the United 
States alone. 

The following table for the decades preceding and fol- 
lowing the establishment of the Empire, shows not only the 
rise and fall of the birth rate, but also the maintenance of 
a rate always sufficiently high to indicate a growth in 
population : ^ 

1851-1860 35.3 per 1000 inhabitants 

1861-1870 37.2 " 

1871-1880 39.1 " 

1881-1890 36.8 " " 

1891-1900 36.2 " 

* The ratio between the two populations is given by Dr. E. J. Dillon as 
standing at present at about 6:4 and advancing perceptibly to 7:4. {The 
Inside Story of the Peace Conference, p. 422.) 

'W. H. Dawson: Evolution of Modern Germany, p. 309. 



The Economic Motives of Colonial Rivalry 17 

The compensation which the rapidly falling death rate 
offered for the more slowly falling birth rate, and the con- 
sequent maintenance of the population increase at more 
than its old rate, may even more clearly be seen from the 
following table of the years between 1870 and 1905: ^ 

Year Population Increase Per Cent. 

1870 40,818,000 *** *** 

1875 42,729,000 1,911,000 4.7 

1880 45,236,000 2,507,000 5.9 

1885 46,858,000 1,622,000 3.6 

1890 49,428,000 2,570,000 5.5 

1895 52,280,000 2,852,000 5.8 

1900 56,367,000 4,087,000 7.8 

1905 60,641,000 4,274,000 7.6 

It is evident that sooner or later a nation faced by such 
a situation must either submit to losses of its citizens by 
emigration to less thickly settled lands, and to their eventual 
absorption by the newer country; or else it must expand 
its own territories by colonization. 

It is not Germany alone which has faced a similar condi- 
tion. Continuing and increasing pressure of population is 
readily apparent in the following table of the yearly aver- 
ages of the excess of births over deaths, which indicates 
essentially similar population problems in the four principal 
European states: ^ 

Germany Great Britain Italy France 

1861-1870...... 408,333 365,499 183,196 93,515 

1871-1880..!... 51 1,034 431,436 191,538 64,063 

1881-1890 551,308 442,112 307,082 66,982 

1891-1900 730,265 430,000 339,409 23,961 

1901-1910...... 866,338 484,822 369,959 46,524 

Great Britain, with its beggarly 120,000 square miles of 

^W. H. Dawson: Evolution of Modern Germany, p. 336. 
*E. J. Dillon: Inside Story oj the Peace Conference, p. 428. The data 
are derived from L' Information. 



18 The Economic Causes of Modern War 

land, could scarce afford standing room for all the men of 
English blood who have gone out to people a quarter of the 
globe. Japan, already overcrowded, is obeying the inevitable 
impulse to expansion, and even the United States — as yet 
hardly aware of the existence of a population problem — is 
sending emigrants from its territory with a population 
density of 30 to the square mile to the farm lands of 
Canada where the density is only two persons to the square 
mile/ 

Overpopulation, by the stern logic of necessity, presents 
the modern state with the alternative either of seeing some 
of its best blood absorbed in other less populous lands and 
forever lost to it, or else of founding colonies in which the 
emigrants crowded out of the homeland may settle to build 
up a new part of the mother country, maintaining the old 
traditions and customs, forming a part of the political organ- 
ization, and opening new markets for the output of the 
industries of the older state. 

For there is a second motive, resulting from the increase 
in population, for the scramble after colonies among the 
great Powers in the last fifty years. An overpopulated 
state cannot be agricultural; it must turn to industry, and 
no state which is predominately industrial can hope to find 
a market within its own frontiers for all the goods that it 
produces. Its own citizens cannot consume, or cannot afford 
to consume, all that they make. The business men of such 
a state, finding their products going begging at home, seek 
for markets abroad, and invariably, not content with sales 
in foreign countries which are too often hopelessly hindered 
by tariff regulation, they demand the establishment of 
colonies as outlets for their wares. 

Such is the condition which has arisen out of the gradual 

^ Contrast this with 780 to the square mile in Saxony, 659 in Belgium, 
474 in Holland. 



The Economic Motives of Colonial Rivalry 19 

transformation of a great part of Europe into an industrial 
region, a transformation which has itself grown, in part 
at least, out of the increase of population. The increase of 
German population and the development of German indus- 
trialism have gone hand in hand with a decrease of German 
agriculture, since an agricultural country cannot be densely 
populated. When a people exceed a certain number, they 
must turn to the close living of an industrial community 
in order to exist, which means that they must produce far 
more than their factories have made before, and that they 
must consequently exceed their own capacity to use. 

There arises in this way an industrial state of the modem 
type, with an increasing population and a decreasing do- 
mestic food supply, a state which must perforce look outside 
its own boundaries for its raw materials and its markets, 
and which must find them lest it starve.^ For only in ex- 
change for products sold abroad can it obtain the food which 
it must have to feed its people. 

The dire straits to which Holland, although a neutral 
country, was reduced durmg the war, through the closing 
of lines of transportation, shutting her off from markets 
previously open, vividly illustrates the common European 
situation. Although the rich black soil of the country had 
at one time sufficed for the needs of the Dutch citizens, 
they, like other European nations, had come to be depend- 
ent on outside sources of supply when the war broke out. 

These sources, one by one, were closed, more gradually 
than in the case of the belligerent states, but none the less 
actually and in some respects even more completely. In 

^ M. Maurice Ajam, head of the Comite de Commerce Frangais avec 
I'Allemagne, while in Germany in September, 1913, summed up the situa- 
tion in a single sentence shorter than this one of my own: "Si I'Allemagne 
n'exporte pas, elle meurt." Ajam: Probleme Economique Franco-Alle- 
mande, p. 25. 



20 The Economic Causes of Modern War 

1918, moved by the menace of the submarine, the Dutch 
began to raise wheat. In one week the government slaugh- 
tered 50,000 cattle to keep them from starving, for there 
was no more fodder. If Holland raises wheat she must 
import fodder; if she raises fodder, she must import wheat, 
for her land is limited in area. It was diflScult or impossible 
under war conditions to import either, and as a result of 
the slaughter of the cattle, the people lived for eighteen 
months practically without meat, upon an allowance of 
one-half pound of fat in ten days, one-tenth of a litre of 
milk a day, two pounds of bread in five days. The bread 
was made of potatoes, beans, peas, linseed — anything that 
was to be had as a wheat substitute. Consumption and 
dysentery ravaged the population, weakened physically 
from the food shortage; and in the last months of the war 
famine was a reality. 

Yet Holland had always been accounted a rich and pros- 
perous country. It was both rich and prosperous in 1914; 
but it was not economically self-sufl&cing. It suffered be- 
cause it relied on outside sources of food supply. 

But the industrial state — and every great Power in 
Europe is an industrial state in this sense — must look beyond 
its boundaries not only for the food that feeds its citizens, 
but also for the food that feeds its mills. There is not a 
state in Europe that does not look beyond its own borders 
for food, raw materials, and markets — in spite of the brave 
attempts made by Germany to be economically self-suffic- 
ing during the war. 

Such a state must find raw materials, ore, lumber, dye 
stuffs, all that it uses in its industries. If it cannot get 
these commodities, its mills must cease to operate, its work- 
ers lie idle, and domestic disaster result. 

A perfect example of this state of affairs may be seen in 
the German Empire at the outbreak of the war. Being a 



The Economic Motives of Colonial Rivalry 21 

manufacturing state, Germany required immense quanti- 
ties of lumber, cotton, wool, silk, copper, platinum, mercury, 
manganese, aluminum, sulphur, and other raw materials, 
only a few of which could be found at all, and none in suffi- 
cient quantities, within her borders. Being a manufactur- 
ing state, hence a state rapidly ceasing to be agricultural, she 
required also foodstuffs adequate to the support of a popu- 
lation which the national fecundity was causing to increase 
constantly. She produced large quantities of coal. Iron, 
thanks to the annexation of the French provinces, she could 
supply in quantity almost sufficient for her needs; but the 
growth of German industry, unless the productivity of the 
mines kept pace with it, would in the end make difficulty 
even here. 

The statistics of import and export for the two years 
immediately preceding the outbreak of the war, serve best 
to show exactly what was happening: 

In millions of marks: * 

Imports 1912 1913 Exports 1912 1913 

.Eaw cotton 579.8 607.1 Machinery and parts. 630.3 680.3 

Wheat 395.8 417.3 Iron and iron goods. .580.9 652.2 

Raw wool 405.9 412.7 Coals 436.6 516.4 

Barley 444.2 390.4 Cotton goods 421.6 446.5 

Copper 313.0 335.3 Woollen goods 253.4 270.9 

In other words, Germany was unable to produce her own 
raw materials, and had to look abroad for the raw cotton and 
wool for her textile industries; but was able to export the 
same commodities, manufactured, at a figure in excess of 
the value of the imports (representing, of course, the labor 
of skilled mechanics), even after the needs of the domestic 
population had been satisfied. It is also significant to note 
that Germany did not export any food products, except 
refined sugar; and one may perhaps pause to reflect that the 

* Statesman's Yearbook, 1916, p. 957. 



22 The Economic Causes of Modem War 

''iron goods" of which more than 600,000,000 marks were 
exported in 1913, included, among other products, Krupps' 
armor plate and artillery. 

The vast disproportion existing between the export and 
the import of foodstuffs is to be seen with equal plainness 
in the same years. Thus, in 1912, the importations of 
agricultural products and foodstuffs in general were 7,100,- 
262,000 marks and in 1913 they were 7,036,738,000. As 
against this, the exports of the same commodities for the 
same years were 1,475,087,000 and 1,728,157,000 marks 
respectively.^ Germany was, in other words, a state com- 
pletely dependent upon other states for the raw materials 
in her most important industries, and for almost all the 
food of a population which averages 310 to the square mile. 

A great part of these imports, interference with which 
would strike at the very life of industry and so at the life 
of the nation itself, came by sea — by the sea which was con- 
trolled by the chief commercial rival of the empire. At any 
time the British fleet could have stopped German industry. 
Until the war broke out in 1914 and the blockade shut down, 
it did not do so; but the industrial chiefs of the German 
Empire, working night and day to force their way into 
British markets and win them for their own, cast anxious 
eyes across the North Sea at the great fleet that waited, 
waited. 

Germany's difficulties were not peculiarly her own, for 
in precisely similar fashion the United Kingdom itself is 
dependent upon imports for the maintenance of the indus- 
trial system. Cut off from importation — as Germany tried 
to leave her through the submarine campaign — the indus- 
tries of Great Britain would be paralyzed while British 

^Statesman's Yearbook, 1915, p. 950. 



The Economic Motives of Colonial Rivalry 23 

workers starved. Raw materials and food alike must come to 
Britain from the lands beyond the sea. Upon the supply of 
cotton from America depends the prosperity of the great 
Lancashire textile mills. For iron, silk, wool, cotton, lum- 
ber, and, most of all, for foodstuffs, Great Britain, like her 
enemy, had to turn to other lands. 

Contrast of the imports and exports of foodstuffs and 
raw materials, revealing the enormous excess of the former, 
demonstrates the total dependence of the population of 
the United Kingdom on external sources of supply, and 
their helplessness the instant the lines of communication are 
cut. The excess of the imports of foodstuffs and raw 
materials over exports, and the corresponding excess of the 
exports of manufactures over imports, both show the entire 
dependence of an industrial state upon the world outside, 
whether for food, raw materials, or markets for manu- 
factures. The following table makes this clear: ^ 

In thousands of pounds sterling: 

Imports Exports 

1914 1915 1914 1915 

Food, drink, and tobacco 296,969 381,901 44,390 47,380 

Raw materials 236,532 287,341 110,571 106,929 

Manufactured articles 160,490 181,515 362,723 314,569 

The condition of France as regards imports and exports 
is essentially the same. The former are mainly food and 
raw materials; the latter primarily manufactured goods. 
The Republic is compelled to rely almost entirely upon 
other states for the supplies upon which her population 
and her industry depend. The figures of import and export 
of food, raw materials, and manufactures differ only in 
detail from those of Great Britain and Germany. The 
basic problem is identical with that of other European 
Powers. Statistics for 1912 and 1913, the two years imme- 

^ Statesman's Yearbook, 1916, p. 80. 



24 



The Economic Causes of Modern War 



diately preceding the World War, illustrate a situation long 
existent: ^ 



In millions of francs: 

Imports 
1912 1913 

Food products 72 76 

Raw materials 193 197 

Manufactured goods . . 64 67 



Exports 
1912 1913 

Food products 33 33 

Raw materials 77 75 

Manufactured goods . . 138 144 



The most important commodities involved are:^ 



In millions of francs: 

Imports 

1912 1913 

Cereals 366.8 613.4 

Wool 684.6 698.8 

Raw silk 319.1 317.3 

Raw cotton 567.1 541.2 

Hides and furs ......222.3 233.5 

Coal and coke 501.4 575.2 





Exports 




1912 


1913 


Textiles (wool) . . 


. . . 190.7 


211.3 


Textiles (silk) ... 


. . .292.3 


374.7 


Texiiiles (cotton) . 


...384.7 


367.4 


Skins and furs . . . 


...321.2 


315.7 


Automobiles 


...207.1 


217.5 


Raw wool 


...362.5 


294.2 



In an even worse plight is Italy, a state which, with a 
grave population problem and with large industries still 
capable of great development, is totally dependent on 
foreign sources for such indispensable commodities as iron, 
coal, and cotton. Precisely as in the case of Germany, Eng- 
land, and France, Italy is dependent, for the continuance of 
industry and for feeding her civilian population, upon the 
keeping open of lines of transportation, which includes the 
sea lanes by which the greater part of her imports come to 
her, and by which her exports reach their markets. 

The economic difficulties of Europe are not confined to 
that continent. Step by step they have followed the adop- 
tion of western modes of life in the island Empire of Japan. 
Like European states, Japan has swiftly come to feel her 
boundaries binding her too closely, and the same series of 



' Statesman's Yearbook, 1914, p. 835. 



The Economic Motives of Colonial Rivalry 25 

causes have been at work in the east as in the west — the 
more clearly because of the brevity of the period within 
which these changes have come about. 

The population of Japan has increased very rapidly, and 
is growing today at the rate of nearly 600,000 a year. 
Estimates fix the number of Japanese in 1828 as 27,200,000. 
The population is known to have been 34,000,000 in 1875, 
and in 1903, including Formosa and the Pescadores, 
50,000,000.^ The density is 387 per square mile, only a little 
less than that of Great Britain, and the rate of increase is 
34.2 per thousand, or 40 per cent, higher than that of Great 
Britain and very nearly that of the German Empire, to 
which in many respects Japan presents a close analogy.^ 
The strides in population have gone on far more rapidly in 
the urban manufacturing centres than in the agricultural 
districts. 

Such a growth of population must inevitably tax the 
capacity of any land, but the limit has been reached sooner 
in Japan than in Europe, because the islands of the Empire 
contain so little arable land. Allowing for the greatest 
possible agricultural extension, fully 80 per cent, of the 
whole area is such that it can never be tilled ^ and the per 
capita share of land suitable for cultivation is but one- 
half acre to each citizen.* It is small wonder, then, that it 

^ These figures are from K. Asakawa: The Russo-Japanese Conflict, p. 
2. They are largely based on the Fourth Financial and Economical Annual 
of Japan, 1904, published by the Department of Finance. 

^See R. P. Porter: Japan, the Rise of a Modern Power, p. 272, whose 
figures are based on the 1913 census. 

' R. P. Porter: Japan, the Rise of a Modern Power, p. 269. 

* These and the following figures are from K. Asakawa: The Riisso- 
Japanese Conflict, pp. 3-5. They are derived from articles in the Koku- 
min Shimbun {National News), February 5, 10, 19, 1904, the Toyo 
Keizai Shimpo (Oriental Economist), May 5, 1903, pp. 17-19, and the 
Twentieth Century, pp. 119 ff. For the sake of convenience, I have re- 
duced them all to bushels, with the ratio, 1 koku = 4.9629 bushels. 



26 The Economic Causes of Modern War 

lias been necessary for the new industrial state to begin to 
look abroad for food supplies, precisely as the states of 
Europe have been constrained to do. 

Rice is the staple article of diet of the people, who of 
course differ in their needs differ in some respects from 
Europeans. In 1877 the production had been 132,013,000 
bushels, but as the need for more food was felt, it was made 
possible, mainly through improved methods of cultivation, 
and with a land increase of only 465,000 acres, to raise this 
to 210,000,000 bushels in 1903. In the same period the pro- 
duction of barley, rye, and wheat (known collectively as 
mugi) rose from 47,644,000 bushels to 94,295,000 bushels. 
But little more land was available, and although the pains- 
taking Japanese farmers were getting all that could be wrung 
from the paddy fields, the state already was forced to import 
both rice and mugi, for consumption already far exceeded 
production. Asakawa's estimates place the annual con- 
sumption of rice in 1903 at about 228,300,000 bushels, and 
of mugi at about 106,700,000. 

How thoroughly the Mikado's people were becoming de- 
pendent on external sources of supply for a variety of com- 
modities may be seen from the following table of the im- 
ports of food and raw materials:^ 

In yen: ^gg^ jgg^ 

Cotton 79,784,772 69,517,894 

Wool 3,397,564 4,811,811 

Rice 17,750,817 51,960,033 

Wheat 240,050 4,767,832 

Flour 3,278,324 10,324,415 

Beans 4,956,000 7,993,411 

Oil-cakes 10,121,712 10,739,359 

Japanese imports today are, like those of European states, 
mainly food and raw materials, and the exports very largely 

*K. Asakawa: The Russo-Japanese Conflict, p. 9. 1 yen =$.4984. 



The Economic Motives of Colonial Rivalry 27 



manufactures, although silk, tea, and copper offer excep- 
tions. The latest information available is contained in the 
following table: ^ 



In thousands of yen: 



Imports 



Exports 





1918 


1919 




1918 


1919 


Raw cotton 


..515,559 


667,867 


Cotton manuf. . 


. . .396,213 


394,294 


Rice 


.. 89,776 
.. 60,146 


162,220 
61,304 


Raw silk 


...370,337 


623,919 


Wool 


Silk manuf 


... 70,178 


101,539 


Iron 


..204,789 


156,579 


Matches 


... 27,743 


32,968 


Sugar 


.. 34,244 


58,184 


Refined sugar . . 


... 23,252 


21,627 


Oil-cakes 


.. 92,255 


135,189 


Tea 


... 23,058 


18,402 


Beans and peas . 


.. 20,396 


35,213 


Copper 


... 37,749 


19,647 



As in Europe, so in Japan, a population which was 
speedily coming to be purely industrial, could live only by 
importing its foodstuffs and raw materials, paying for them 
with its manufactures. Foreign trade had grown between 
1873 and 1903 from 49,742,831 yen to 606,637,959 yen, and 
even in 1903, 84.6 per cent, of this trade consisted of manu- 
factured articles.^ In 19 19 British calculations gave a total 
foreign trade of 427,219,194 pounds sterling.^ 

For these three reasons, then, a great modem state must 
possess colonies: to provide room for overflow of popula- 
tion within the national area; to bring under the national 
flag the sources of foodstuffs and raw materials; and to 
provide markets for the manufactures of the parent state. 
The United States, to be sure, furnishes an apparent excep- 
tion to this rule. Our tradition is anti-imperialistic. We 
are without an empire and we do not at present ^ desire to 

^Statesman's Yearbook, 1920, p. 1028. 

"K. Asakawa: The Russo-Japanese Conflict, pp. 2-3. 

' Statesman's Yearbook, 1920, p. 1027. 

*The possession of the Panama Canal has led the United States into a 
course of action which may prove the germ of an imperialistic policy in 
the Caribbean Sea. Rear-Admiral Colby N. Chester, U.S.N., has char- 
acterized these waters and the Gulf of Mexico as "the larger Panama Canal 
Zone." American influence is paramount in Cuba; Porto Rico has been 



28 The Economic Causes of Modern War 

possess one ; but this is merely the attitude of a new people 
in a vast and as yet only partially developed country, where 
the pressure of population has scarcely begun to make itself 
felt, where the phenomenon of production beyond domestic 
needs has barely appeared, and where our immense wealth 
in natural resources leaves us largely untouched by the 
problem of raw materials and food supplies. 

To the states of Europe, however, these problems are ever- 
present. They require new lands where their citizens, 
crowded out at home by the growth of the population, may 
settle, where new markets and new supplies of raw materials 
for the industries, and of foodstuffs for the people, of the 
fatherland, may be found. That their citizens should 
emigrate to other lands and be permanently lost to them 
is intolerable; and even though markets, raw materials, 
and foodstuffs might all be found in the territories of other 
nations (usually hedged about with tariff restrictions), 
none the less each state, facing the perpetual possibility of 
war, wishes to be economically self-suflB.cient within its 
own dominions. 

Colonies they had to have; colonies they came to possess; 
and, once obtained, the colonies with the routes that led 
to them had to be defended. Out of this sprang the com- 
petition in military and naval armaments; and the effort 
to construct great fleets necessarily involved a scramble for 
naval bases and strategic points only a shade less undigni- 
fied than that for colonies. 

South America, Asia, and Africa were the undeveloped 

annexed; the Virgin Islands purchased from Denmark; the Canal Zone 
leased from the Republic of Panama; Fonseca Bay leased for 99 years 
from Nicaragua; and administrative or financial supervision begun over 
the Dominican Republic and Haiti. See J. H. Latane; From Isolation to 
Leadership, pp. 132-133, and Admiral Chester's address, "The Present 
Status of the Monroe Doctrine," in the Annals oj the American Academy 
of Political and Social Science, 54:20-27, Jy., 14. 



The Economic Motives of Colonial Rivalry 29 

lands that could be exploited. American pride leads us to 
believe that it is our veto upon further colonization in 
South America, expressed in the Monroe Doctrine, that 
has prevented European expansion there; but it is at least 
significant to note that upon each of the three occasions 
when the Doctrine has been tested, the European Balance 
of Power has operated to uphold it and to prevent the seiz- 
ure of territory or the establishment of a recognized "sphere 
of influence." ^ Whether because of the Monroe Doctrine 

*The three chief tests of the doctrine have been: 1. The French in- 
vasion of Mexico, 1861-1866. Designed to place Maximilian on the throne, 
the attempt ended in the withdrawal of the French troops supporting 
the ill-fated Empire, under the combined influence of American threats 
and Napoleon Ill's fear of the rising power of Prussia, which crushed 
Denmark in 1864 and Austria in 1866. American representations were by 
no means to be neglected at this time, however, since the United States 
had at its disposal, after the collapse of the Confederacy, a large and 
well-trained army. 

2. The Venezuelan boundary controversy with Great Britain in 1895. 
Great Britain yielded her claim to extend the Guiana boundary at the 
expense of Venezuela, but three dates make her motives fairly clear. 
President Cleveland's Message to Congress on this subject was trans- 
mitted December 17, 1895. The Jameson Raid in the Transvaal occurred 
December 29, and the famous telegram of sympathy from the German 
Kaiser to President Kruger was sent January 3, 1896. 

3. The blockade of Venezuela by Great Britain, Italy, and Germany. 
This has been regarded as a ballon d'essai on the part of Germany, with 
a view to subsequent colonization in South America if the United 
States failed to stand firm in support of the Monroe Doctrine. When, 
however, Italy and Great Britain withdrew and accepted arbitration of 
their claims, the British navy stood behind the Doctrine. 

Professor J. H. Latane's comment on the role of the European Balance 
of Power in maintaining the Monroe Doctrine is applicable here: "While 
England has from time to time objected to some of the corollaries de- 
duced from the Monroe Doctrine, she has on the whole been not unfa- 
vorably disposed toward the essential features of the policy. The reason 
for this is that the Monroe Doctrine has been an open-door policy and 
has thus been in general accord with the British policy of free trade. 
The United States has not used the Monroe Doctrine for the establish- 
ment of exclusive trade relations with our southern neighbors. . . . There 
has, therefore, been little rivalry between the United States and the 
Powers of Europe in the field of South American commerce. Our in- 



30 The Economic Causes of Modem War 

or because of the mutual jealousy among the European 
Powers, or because of the strength of the British navy, the 
fact remains that the further acquisition of territory in the 
Americas by European states has been blocked since the 
announcement of the Doctrine by President Monroe in 
1823. 

Only Asia and Africa, then, lay open to the colonizing 
powers, and in both continents the lands of the native states 
have been gobbled up mercilessly, on the flimsiest pretexts 
and seldom with any real justification of the high-sounding 
talk of "vital interests," "spheres of influence," "the advance 
of civilization," and "the white man's burden." 

But if colonies are to furnish an outlet for a surplus popu- 
lation and for surplus manufactures, if they are to supply 
the mother country with the raw materials necessary to 
her industries, the trade routes leading to them must be 
free at all times. Great Britain, the first in the modern 
colonial field had seen this before the rest of the European 
states, and with a powerful fleet, with her troops safely 
ensconced in half the strategical locations of the earth, and 
with commanding positions on all the trade routes to her 
most important colony, India, she possessed the command 
over the sea lanes of which the other powers more and more 
came to feel the need. 

terest has been political rather than commercial. We have prevented 
the establishment of spheres of influence and preserved the open door. 
This situation has been in full accord with British policy. Had Great 
Britain adopted a high tariff policy and been compelled to demand com- 
mercial concessions from Latin-America by force, the Monroe Doctrine 
would long since have gone by the board and been forgotten. Americans 
should not forget the fact, moreover, that at any time during the past 
twenty years Great Britain could have settled all her outstanding dif- 
ficulties with Germany by agreeing to sacrifice the Monroe Doctrine and 
give her rival a free hand in South America. In the face of such a com- 
bination our navy would have been of little avail. . . ." — J. H. Latane: 
From Isolation to Leadership, pp. 52-53. 



The Economic Motives of Colonial Rivalry 31 

With the exception of the Kiel and Panama Canals, there 
is not a strategic point upon the trade routes of the world 
that Great Britain does not control ; and today the German 
dominance over the former has been ended, while the 
foreign policy of the United States is such that the Ameri- 
can ownership of the Panama Canal is an adequate guar- 
anty of the safety of British trade without putting the 
Empire to the trouble of controlling it. 

The best single instance of the importance to modern 
industrial nations of trade routes in general, and of the 
command of the approaches to rich colonies in particular, is 
to be seen in the British policy of winning every one of 
the approaches to India. Throughout the entire Nine- 
teenth Century and until their design was accomplished in 
the Twentieth, British diplomats have bent every effort 
towards securing the points of dominance along every 
possible avenue leading to the Indian Empire, whether on 
land or sea. The policy may have been to a degree uncon- 
scious in the statesmen who initiated it; but in later stages 
its objects have been defined with perfect clearness, until 
in the first twenty years of the present century the work of 
over a hundred years was brought to completion. The last 
and frankest statement of this century-long effort of Great 
Britain was made by Winston Spencer Churchill, in an 
interview given to an American journalist during the war: 

"History will vindicate the Dardanelles expedition. It was 
planned with the sole idea of cutting and keeping closed the Ger- 
man road to India." ^ 

Because of India, Great Britain made war on Napoleon 
in the Mediterranean, in Egypt, and in Syria. When Mo- 
hammed Ali set out from Egypt to overthrow the Ottoman 

^ Isaac F. Marcosson: Adventures in Interviewing, p. 154. 



32 The Economic Causes of Modern War 

Empire, he found a British army confronting him in Syria, 
just as Napoleon had, and for the same reason — to prevent 
any threat to the safety of the Indian Empire which is 
economically all-important to Britain. At the Congress of 
Berlin the English asked only for the possession of certain 
of the approaches to India^ — Malta, the Cape of Good Hope, 
Mauritius, the Seychelles, and Ceylon. In defiance of public 
opinion and the common sentiment of Christendom, British 
foreign policy opposed the aspirations of the Balkan states 
for independence and condoned the barbarous massacres 
of Christians by the Turks, lest the route across the Isthmus 
of Suez (safe enough whilst the important Ottoman Empire 
held Constantinople) should be threatened by its weaken- 
ing, and lest Russia might then establish herself instead of 
Turkey on the Golden Horn, at a time when Russian expan- 
sion south and east through Asia was regarded as threaten- 
ing to India. 

It was to prevent such an occurrence that Disraeli was 
ready to start another war with Russia, did in fact set the 
British fleet in motion, rather than permit the Treaty of San 
Stefano to stand, and Russia to push nearer to the possession 
of Constantinople. Because the proposed construction of 
the Suez Canal opened a new route to India which would be 
in possession of another Continental Power, Great Britain 
opposed it; but when — protest having been without avail, 
and the canal having been constructed — the Prime Minister, 
Disraeli, was able to buy hurriedly from the bankrupt Khe- 
dive of Egypt enough of the stock to give the Empire an 
opportunity to control the canal, English foreign policy 
made an abrupt aboutface. 

No longer was the Ottoman Empire useful as a guardian 
of India, and her quondam friend was the first to attack the 
integrity of the imperial territories. Cyprus first, then 
Egypt, with only the flimsiest disguises, were transferred to 



The Economic Motives of Colonial Rivalry 33 

British hands, and only then did the Balkan policy change, 
and only then were the oppressed Balkan nations permitted 
to seek what were, for one in the game of international 
politics, "legitimate aspirations." 

For the further protection of India, Great Britain entered 
upon an effort for the control of the passages into the Indian 
Ocean, the Gulf of Bengal on the east, and the Arabian Sea 
on the west, and of the passages from the Indian Ocean into 
these two smaller bodies of water. Soon it was found neces- 
sary to secure control of the shores of the Arabian Ocean 
and of the Gulf of Siam, and then the policy began to be 
extended to the Hinterland as well. 

Surely, however, the enormous fleet of Great Britain was 
sufi&cient to protect the sea lanes leading to India, once it 
was assured that no hostile power could possibly find footing 
on the neighboring coasts. No, for a modern fleet in being, 
imposing as its power may be, is in another sense a very 
delicate and sensitive mechanism. The modern war vessel, 
like any other complex mechanism, gets out of order easily. 
DifiSculties with engines, electric lighting, electric ammuni- 
tion supply, electric fire control, injuries to hull, to wireless, 
to superstructure, to bulkheads, — any one of these may 
reduce the most powerful fighting structure afloat to rela- 
tive impotence. Because of this, a great Power must have 
naval bases scattered throughout the world, points where 
a warship may find drydocks, skilled mechanics, and an 
opportunity to refit. 

More than this, there is the perpetual problem of fuel 
supply. The quantity of coal used by a Dreadnaught or a 
battle cruiser is tremendous; and even though the modern 
oil-burning vessels have modified the fuel factor so as to 
extend the cruising radius, they must in the end face the 
same problems. It must be remembered that, although in 
time of peace a warship may revictual and refuel in any 



34 The Economic Causes of Modern War 

port, in time of war international law (which in this point, 
at least, is likely to be observed) permits the supply by a 
friendly Power of only 24 hours' fuel, or of enough to permit 
the vessel to reach its nearest home port. 

Since fleets are planned and administered for use in time 
of war, naval bases must be located with reference to their 
needs under such conditions, and therefore if the British 
fleet is to protect India, there must be naval bases in the 
Mediterranean, in the Far East, and conveniently near the 
Indian Ocean, Not only this, but, smce the needs of a 
possible hostile fleet would be essentially identical with those 
of the British fleet, against which it would operate in these 
very waters, foreign naval bases must be excluded from this 
territory. The obvious solution is to grab all points 
available, if not for British use, then to keep other powers 
from gaining a foothold. 

So it is that from a fundamentally economic motive — the 
protection of a profitable colony — we find the acquisitions 
of a century accounted for, some won while the evolution 
of modern navies was barely beginning to make the problems 
of the naval policies of today apparent, others the spoil 
of very recent years. This is why we find on the routes to 
India a veritable chain of British possessions: Gibraltar, 
dominating the entrance to the Mediterranean, Malta, 
Cyprus, guarding the trade lanes within the sea, the 
approaches to Egypt and the Suez Canal, and through them, 
the approaches to India itself. Egypt has long been in 
British hands for all its nominal allegiance to the Sultan; 
even this cloak is now thrown off. Beyond the canal lie 
Aden, Perim, and the Sudan, all in British control, all 
guarding India, all making for the convenience of the 
British power in wartime — all the logical outgrowth of a 
colonial poHcy which is itself the outgrowth of economic 
need. 



The Economic Motives of Colonial Rivalry 35 

In the west, Sokotra, the Seychelles Islands, and others, 
and the Bahrain Islands m the Persian Gulf, keep out 
intruders. At the southern extremity of India, Ceylon 
(itself an economic asset as well as a strategic) serves for 
defense, as do the islands in the Bay of Bengal ; and further 
to the east, Singapore, the Malay Peninsula, and the north 
shore of Borneo ward off attack by way of the Pacific. 

In order to estabhsh a strategic frontier to the north, 
mainly in fear of Russian aggression. Great Britain has 
worked for years, with constant wars against natives not 
whoUy appreciative of the advantages of British Kultur, 
and with equally constant friction with Russia and the 
eternal possibility of a Russian war. During the years be- 
tween 1875 and 1903 Baluchistan was gradually brought 
under British rule. Afghanistan, extending north and east, 
one of the two mam keys to India, was forced to accept 
British dominion with nominal independence, after inva- 
sions in 1839, 1842, 1878, and 1880. In 1907 the Anglo- 
Russian agreement further strengthened the British hold 
on India by eliminating the possibility of imperialistic 
aggression from the north. 

Tibet is not yet British, but it has already been invaded 
by expeditionary forces, and would undoubtedly have been 
the scene of further massacres (for that is what the combats 
between trained British troops and the untrained and in- 
effective Tibetan natives amounted to) had not the agree- 
ment of 1907 put an end to territorial rivalry and given at 
least a temporary assurance that — with the prospect of Rus- 
sian seizure put away — there could be no threat to India 
from a province under the suzerainty of the weak Chinese 
Empire. 

Nepal and Bhutan, except for Afghanistan the only re- 
maining "independent" states on the Indian border, are 
secured to the British by large subsidies and strictly enforced 



36 The Economic Causes of Mod&rft War 

promises of "good behavior.'' Part of the latter was an- 
nexed in 1864 and in Bhutan there has been a British 
Resident for a century. 

India furnishes an example on a large scale of the way 
in which the necessity for the possession of colonies in turn 
leads to the necessity for a fleet, which in its turn leads to 
the need for naval bases; and it furnishes an example, too, 
of the way in which the protection of trade routes demands 
the control of every important point along them that the 
colonial Power can secure. It shows also the likelihood of 
native wars for the "rectification" of a "scientific" frontier. 

The creation of a fleet by one power for the protection of 
its colonies is an implied threat to the safety of the colonies 
of other powers and to their trade, through the eternal 
possibility of the stoppage of the sea lanes. If the threat- 
ened powers possess fleets or begin to build them, we have 
the germs of naval rivalry, in itself an incentive to war 
through mutual fear, through mutual jealousy, and through 
the chauvinism of the rival naval castes. 

All of this springs from colonization and the protection of 
trade routes, and we have seen the chain of economic 
causation by which the need for colonies and the imperative 
necessity of foreign trade grows from overpopulation, creat- 
ing an industrial civilization, which brings about excessive 
production and the need for food, raw materials, and markets 
beyond those that the home state can furnish. In other 
words, the disputes over colonies which have lain at the 
root of the wars and likewise of the international dissen- 
sions which have threatened wars for the last half century, 
have — whatever their immediate and ostensible causes — 
had an economic root in rivalry for markets and raw mate- 
rials. National rivalry, naval rivalry, military rivalry, colo- 
nial rivalry are but different forms of the fundamental and 



The Economic Motives of Colonial Rivalry 37 

underlying economic rivalry among modern nations. Such 
economic rivalry is the natural result of growing populations 
and of production beyond their own needs among the states 
of Europe, which have become increasingly industrial and 
decreasingly agricultural because of this very growth of 
population. 

Having examined the general principles out of which wars 
have sprung, and having seen how it is, in general, that 
modern wars may be produced, let us examine, one by one, 
the wars of the last quarter of the Nineteenth Century and 
of the beginning of the Twentieth Century. In each we 
shall discover an economic factor, whether immediate or 
derived. In each we shall find causes other than economic; 
but in every one (ranging from minor conflicts with native 
tribes in the pursuit of colonial policies, to hostilities be- 
tween two great Powers, and finally to the catastrophe of 
the World War) we shall find the economic factor, more or 
less disguised. 

Let us not be deceived by words. "Legitimate aspira- 
tions," "national ambitions," "hegemony," "special inter- 
ests," "spheres of influence," "national security" — most of 
these are nothing save high-sounding phrases, gracefully 
glossing over stark economic desires, needs, greeds, ambi- 
tions, and savagely bitter rivalries. 



CHAPTER III 

THE ECONOMIC MOTIVES OF THE WARS OF THE WORLD: 

1878-1914 

The year 1878 is one of the most momentous in European 
history, marking as it does the beginning of the movements 
which ended in the formation of the two great alhances 
whose feuds, jealousies, and suspicions found their natural 
culmination in the World War of 1914. It is from the 
Congress of Berlin, held in this year to readjust the peace 
terms imposed upon Turkey by the victorious Russians in 
the Treaty of San Stefano, that the epoch of tremendous 
armaments under which Europe has groaned for the last 
half century may properly be dated. Wars there have been 
before this date, and preparations for war, but never on 
such a scale as have developed in our own time through the 
national rivalries fostered by underlying economic conflicts. 

The Congress of Berlin marks the close of the period of 
nationahst revolutions and wars in Europe. With one or 
two exceptions, all the European states had attained sta- 
bility in their constitutional systems. From this time on, 
diplomatic ambition tended more and more to extra-Euro- 
pean interests; but the alliances that resulted from the 
Treaty of Berlin did not make easier the solution of the 
vexing questions of international economics that were to 
come. Our planet had grown into an economic whole. 
There was no precedent in statecraft for such a world sit- 
uation. 

The root of half the international unrest in Europe is to 
be found in this treaty, in the hatreds, dissatisfactions, and 



The Wars of the World: 1878-1914 39 

injustices which it created; and the wars which have suc- 
ceeded it, show with greater clearness than ever before the 
importance of the economic factor in the causation of war. 

The Congress of Berhn itself may be said to have arisen 
from economic causes, for it was the result of British in- 
sistence upon blocking the Russian movement towards Con- 
stantinople — a policy which was itself of economic origin. 
The desire of Russia for the possession of Constantinople 
is the natural demand of an enormous hinterland for an 
outlet upon warm water. Russia, primarily an agricultural 
land, has always been denied access to the sea, in spite of 
her thousands of miles of coast. Archangel, her northern 
port, is insufl&cient because of the ice which closes it for half 
the year. The port of Vladivostok, opening on the Pa- 
cific, had not then been established, and even today is in- 
adequate to satisfy the needs of the Empire; and the Baltic 
ports were too few in number to serve as outlets for so 
large a territory. Constantinople is so situated that it 
can at any time command complete control over the com- 
merce of southern Russia, passing from the Black Sea out 
into the Mediterranean. The Sultan's interdict upon the 
passage of war vessels, effectually enclosing the Black Sea 
fleet and facilitating the British defense of the Suez Canal, 
eliminated Russia as a naval power in the Mediterranean, 
since operations conducted from a Baltic base were wholly 
out of the question. Russian eagerness for the possession 
of this historic city has been an assumption in international 
politics for a century at least. 

So much for the economic motives on one side; they 
found themselves blocked by economic motives almost as 
powerful on the other — an economic rivalry which made 
itself felt in Continental and colonial affairs constantly un- 
til the final adjustment of Anglo-Russian differences in 
1907. British fear of the results in India of Russian ex- 



40 The Economic Causes of Modem War 

pansion had made it a cardinal principle of foreign policy 
to check Slavic expansion in any direction, and especially 
towards Constantinople, which then dominated the land 
routes now followed by the Suez Canal. It is largely in 
following out this fundamentally economic policy that 
Great Britain had fought Russia in the Crimea in 1854-56 ; 
and after the building of the Canal and its passage into 
British hands, it was more than ever important that no 
power should be allowed to establish itself on the Bosphorus 
which might ever be either capable or desirous of threat- 
ening the vital artery that led straight to the richest colony 
of imperial Britain. 

At the outbreak of the war with Turkey in 1877, the 
Tsar had given his word that he had "not the smallest wish 
or intention to be possessed of Constantinople." The Turks 
capitulated early in the following year, as the Russian ar- 
mies were moving out of Adrianople against the last line 
of defense remaining in front of the Turkish capital; and 
in the peace of San Stefano, Russia, flushed with victory, 
had imposed terms of peace which left Constantinople to 
the Turks indeed, but which carried Slavic territory to 
their very doors, by the erection of an enlarged Bulgaria 
which would include all of eastern Rumelia, and which 
would extend Russian influence so near to the all-impor- 
tant city as to be, in the British view, dangerous in the ex- 
treme. 

The Treaty of San Stefano was unsatisfactory to the 
other Great Powers for a variety of reasons. To Great 
Britain, the weakening of Turkey which would result from 
it, meant the possibility of Russian development which 
might become threatening to her colonial possessions; and 
this fear, economic in origin, was enhanced by the creation 
of the new Bulgarian state, which, it was thought with 
good reason, would be a mere appanage of Russia and 



The Wars of the World: 1878-1914 41 

which would certainly be an extension of Slavic power. To 
Austria-Hungary the treaty was equally unsatisfactory, be- 
cause it increased Russian influence in the Balkans to such 
an extent that the Austrian ambition for the development 
of her influence in the regions in which lay some of her 
most important markets might have to be modified or 
abandoned. 

Bismarck, professing entire disinterestedness, but really 
desirous of having a finger in the international pie for the 
sake of maintaining the German hegemony which he had 
so dearly bought, offered his services as a mediator (or, 
in his own phrase, as an "honest broker"), between the 
conflicting interests of the Powers. The Congress of Ber- 
lin met for its first session at two o'clock in the afternoon 
of June 13, 1878. After a month of stormy sessions (dur- 
ing which the Russian plenipotentiary. Prince Gortchakoff, 
and the English Prime Minister, Lord Beaconsfield, both 
threatened to break off negotiations) the Treaty of Berlin 
was finally patched together. England checked Russia at the 
Bosphorus, for Macedonia was secured to Turkey, thus 
keeping the Slavs at a distance from Constantinople and 
the route to India. Bulgarian boundaries were so drawn 
as still more to halt the extension of Slavic power. Aus- 
tria-Hungary secured her "rights" in Bosnia-Herzegovina, 
the privilege of administration and the right of maintain- 
ing a military force in the neighboring Sanjak of Novi- 
Bazar, which was later to acquire a peculiar economic im- 
portance in connection with the Bagdad railway. 

The most immediate and obvious international result of 
the treaty was the abrupt endmg of the era of good feeling 
which had hitherto existed between Russia and the new 
German Empire, an event which roused Bismarck to the 
necessity of securing an Austrian alliance against the Rus- 
sian attack which seemed imminent. On October 7, 1879, 



42 The Economic Causes of Modem War 

this alliance was concluded. Its most important provi- 
sions were: 

"1. Should, contrary to the hope and against the sincere wish 
of the two High Contracting Parties, one of the Empires be at- 
tacked by Russia, the High Contracting Parties are bound to 
stand by each other with the whole of the armed forces of the 
Empires, and, in consequence thereof, only to conclude peace 
jointly, and in agreement. 

"2. Should one of the High Contracting Parties be attacked 
by another Power, the other High Contracting Party hereby 
binds itself, not only not to stand by the aggressor of its High 
Ally, but to observe at least an attitude of benevolent neutrality 
towards its High Contractor. 

"3. If, however, in such a case, the attacking Power should 
be supported by Russia, either in the form of active co-opera- 
tion or by military measures menacing to the party attacked, the 
obligation defined in Clause I of reciprocal help with the entire 
armed strength comes immediately into force in this case also, 
and the war will then also be waged jointly by the Two High 
Contracting Parties until the joint conclusion of peace." 

Germany was thus secured against attack by Russia, or 
by Russia aided by France; and assured, too, of the neu- 
trality of Austria in the event of an attack by either of 
those powers acting alone. 

To make assurance doubly sure, Bismarck still desired a 
third member of the alliance, and he turned to Italy as the 
only available power. To reconcile the Italians to becom- 
ing the allies of Austria, their traditional foes, the astute 
German Chancellor had recourse to playing upon the eco- 
nomic desires of France and Italy and stirring up the latent 
colonial rivalry between them. Realizing perfectly that 
both states wished to expand in Tunis, he is said to have 
given France secretly to understand, in 1882, that there 
would be no German opposition to her occupancy of that 
land ; and then to have taken advantage of the Italian in- 



The Wars of the World: 1878-1914 43 

dignation at being anticipated in colonization by the 
French, to draw a third member into the German-Austrian 
alliance. 

The existence of such a Triple Alliance was a tacit threat 
to the other Powers of Europe. It could be met only by 
the formation of a rival alliance, and towards this inev- 
itable event history gradually shaped itself. France and 
Russia formed a Dual Entente in 1891, almost ten years 
afterwards. England, by the agreement with France in 
1904 and with Russia in 1907, became practically a part of 
a league which, not so closely knit as was its rival, is best 
described in the phrase usually applied to it — the Entente. 

In the Congress of Berlin we have, then, the origin of 
the two alliances which have divided Europe ever since. 
The history of the wars of Europe, from this time on, is 
the history of the colonial ambitions, commercial enter- 
prises, economic difficulties, of one or the other of them. 
Although never until 1914 did the two great groups of 
powers come to grips, yet every one of the component states 
has been involved again and again in wars in which the 
economic motive was predominant; and in each case the 
issue has been affected by the existence of the alliances 
and the ever-present possibility of the two groups' be- 
coming involved as wholes. During this period the in- 
dustrial changes of the century became complete. From 
1878 we have a new relationship in the affairs of Europe, 
and from this year we may begin our survey of the eco- 
nomic rivalries which have produced its wars. 

Two more events mark the year 1878 as significant in 
the history of Europe. One was the return from Africa 
of Henry M. Stanley, sent thither by the New York Herald 
to find the missionary, David Livingstone. Though it lies 
at the very doors of Europe, though its northern coast had 



44 The Economic Causes of Modern War 

supported a flourishing civilization when all Europe was a 
wilderness, and though eight generations of European mari- 
ners had circumnavigated the continent on their way to 
India, Africa was an almost unknown land. That it had 
been permitted to remain so while distant America was 
growing into a great state, is due to the peculiarly in- 
hospitable character of the coasts. The vast and fertile in- 
terior plateau is nearly everywhere shut away from the sea. 
either by parched deserts or malarial swamps, while the 
great rivers, with courses interrupted either by falls or 
rapids, hold out little inducement to the navigator. Ex- 
cept for English and Dutch settlements at the extreme 
south, the French in the extreme north, a few trading 
centres on the West Coast, and some all but derelict Portu- 
guese stations in Angola and Mozambique, the whole con- 
tinent lay available for exploitation by European powers 
upon whom economic pressure was just beginning to be 
galling. Only in the light of the last fifty years can the 
true significance of Stanley's return be appreciated. It 
meant the opening up of a Continent, old but new, and of 
a host of economic rivalries which were to imperil the peace 
of the whole globe. 

The other event was the announcement of the invention 
by the EngUsh metallurgist, Sidney Gilchrist Thomas, of 
a new method of manufacturing steel of the first quality 
from phosphorus-bearing ore. Continental ironmasters, 
especially the Germans, had profited little from Sir Henry 
Bessemer's earlier discovery of a method of converting pig 
iron into steel, for Bessemer had based his process on ex- 
periments upon English ores without phosphorus, and it 
was inapplicable to the rich ore deposits of Lorraine, which 
contained much of this element. Although the English 
manufacturers failed to appreciate the enormous signifi- 
cance of Thomas's new process, their German rivals were 



The Wars of the World: 1878-1914 45 

more alive to its value; and with it as a foundation they 
began the vast development of the German iron industry 
which won world supremacy in the most important com- 
modity of the Age of Steel. It was by the adoption of an 
Englishman's invention and the seizure of the French iron 
fields that they were able to win it. Thomas, through his 
discovery, was unwittingly helping to initiate the struggle 
for iron fields which was one of the most important phases 
of the forty years of bitter economic rivalry that followed, 
culminating in a world war. 

More convincing than a priori discussion of the economic 
causes which produce war, is examination of the history 
of the period since 1878 and a study of the genesis of the 
wars that have occurred during that time. How does the 
theory of the economic chain of causation which makes war 
inevitable bear application to the events of history? The 
question is to be answered only after scrutiny of the fun- 
damental causes of the wars that have actually been fought. 
According to the theory outlined in the last two chapters, 
the great wars of the period should be traceable — not di- 
rectly, perhaps, but always ultimately — to economic causes. 
Rivalry for colonies, the desire for trade routes, the at- 
tempt to secure the naval bases essential to both of them, 
naval rivalry born of colonial policy, the desire for mar- 
kets, food, or raw materials — these should be found, if the 
chain of causation is valid, at the root of the wars that have 
been fought since the world became an economic unit — 
roughly, since the Treaty of Berlin. 

An exhaustive list of the military operations since 1878 
shows that during forty years there have been only four in 
which the world was everywhere at peace: 1886, 1888, 1889, 
and 1910. 



46 The Economic Causes of Modem War 

Wars of the World: 1878-1918 ^ 

1878-1882 — Afghan Wars (Great Britain and Afghanistan). 
1879-1883— Nitrate War (Chile against Peru and Bolivia). 
1879 — Zulu War (British campaign against the Zulus). 
1880-1881— First Boer War (Great Britain and Boer settlers). 
1881 — Russian operations in Turkestan, 

1882-1885 — French colonial wars in Annam. 
1882-1898— British occupation of Egypt. 

1883 — Military revolt in Spain. 

1884 — Russian operations in Afghanistan. 

1885 — Serbo-Bulgarian War. 
1885 — Bulgarian Revolution. 

1887 — First Abyssinian War (Italian invasion of Abys- 
sinia). 

1890 — War between Guatemala and San Salvador. 

1891 — Military revolt in Portugal. 

1891 — Chilean Revolution. 

1892 — Revolts in Argentina. 

1892 — French operations in Dahomey. 

1892 — Revolt in Venezuela. 

1893 — Hawaiian Revolution. 
1893 —Revolt in Sicily. 

1893 — Spanish operations against Moors. 
1893 — Brazilian Revolution. 

1893 — Argentine Revolution. 

1894 — Hottentot Revolt in German Southwest Africa. 
1894-1895— Chino-Japanese War. 

1896 — Insurrection in Crete. 

1896 — Anti-Armenian riots in Constantinople. 

1895-1896 — Ashantee War (Great Britain against Ashantee 

tribesmen) . 
1896 ' — British bombardment of Zanzibar. 
1896 — Revolt in Philippines. 

1896 — Second Abyssinian War (Italians against Abys- 

sinians) . 

1897 —Greco-Turkish War. 

^This list is from data compiled in the library of the General Staff 
College, United States Army. 



The Wars of the World: 1878-1914 47 

1895-1898 — Cuban Insurrection. 

1898 — Spanish-American War. 

1899-1900— Philippine Insurrection. 

1899-1902 — Second Boer War (Great Britain against Transvaal 

and Orange Free State) . 
1900-1901 — Boxer Uprising and Allied Relief of Peking. 

1901 — Colombian Revolution. 

1902 — British operations in Somaliland. 

1903 — British operations in Tibet. 

1903-1908 — Herero Rising (German operations against natives 

of German Southwest Africa). 
1904-1905 — Russo-Japanese War. 
1908-1909— Civil War in Morocco. 
1908 — Italian operations in Somaliland. 

1908 — Haitian Revolution. 

1909 — Rebellion in Santo Domingo. 
1909 — Civil War in Nicaragua. 

1911 — Italo-Turkish War. 

1912 — Mutiny of native troops in French Morocco. 
1912 — Mexican Revolution. 

1912-1913— First and Second Balkan Wars. 
1914-1918— World War. 

For convenience, this list may be reduced by the elimi- 
nation of racial riots, revolutions in South American states, 
and minor wars with savage tribes. Study of the causes 
of such minor military operations as are involved in these 
trifling conflicts and in the revolutions of unsettled states, 
sheds little light on the main problems of the causes of 
international war. Operations against savages which are 
directly due to the invasions of white settlers, are obvi- 
ously the outcome of the economic conditions sketched in 
the last chapter, which make necessary the colonization 
that is necessarily resisted by the natives of the colonized 
lands. A few such campaigns, selected so as to be typical 
of all, are sufficient to illustrate the strictly economic char- 
acter of these struggles. Yet the list of the wars of the last 



48 The Economic Causes of Modern War 

forty years, thus reduced, must be sufficiently extended to 
include all the major international conflicts of the period 
and the more important wars of colonization. With these 
eliminations, twenty wars remain to be considered: 

The Principal Wars: 1878-1918 

1878-1882— Afghan Wars. 
1879 —Zulu War. 
1879-1883— Nitrate War. 
1880-1881— First Boer War. 
1882-1898— British Occupation of Egypt. 
1882-1885 — French Colonial Wars in Annam. 
1885 — Serbo-Bulgarian. 
1887 — First Abyssinian War. 
1894-1895— Chino-Japanese War. 
1895-1898 — Cuban Insurrection. 

1896 — Second Abyssinian War. 

1897 —Greco-Turkish War. 

1898 — Spanish- American War. 
1899-1902— Second Boer War. 
1900-1901— Boxer Uprising. 
1903-1908— Herero Rising. 
1904-1905 — Russo-Japanese War. 
1911-1912— Italo-Turkish War. 
1912-1913— Balkan Wars. 
1914-1918— World War. 

One fact leaps to light immediately: namely, that five 
of these conflicts, omitting the World War of 1914-1918, 
have occurred — whether rightly or wrongly — as a result 
of the spread of the British imperial dominion, made nec- 
essary by economic pressure. These are the Afghan Wars 
of 1878-1882, which, as we have already seen, had to do 
with safeguarding the rich British possessions in India; the 
Zulu War of the same year, which was made necessary by 
the spread of British rule in South Africa; the Egyptian 



The Wars of the World: 1878-1914 49 

War of 1882, which, with the subsequent fighting in the 
Sudan, was a natural consequence of the British interfer- 
ence in Egypt, a measure in itself intimately connected with 
the protection of the Suez Canal and the trade route to 
India; and the two Boer Wars in South Africa, one lasting 
from 1880 to 1881, and the second from 1899 to 1902, and 
taxing the resources of the entire Empire, both results of 
the friction growing out of the British colonial policy. 

Seven more of the wars upon the list have their origin di- 
rectly in colonies or colonial administration : the two Abys- 
sinian Wars, the Cuban Insurrection of 1895-1898, leading 
directly to the Spanish-American War, the little colonial 
war of the French in Annam, the Herero Rising in Ger- 
man Southwest Africa, and the Italian-Turkish fighting 
over Tripoli in 1911. 

Both the Chino-Japanese and the Russo-Japanese Wars 
were the direct outcome of imperial expansion and of eco- 
nomic rivalry, for the first resulted from the rivalry of the 
two nations in Korea, and from Chinese supineness before 
Occidental greed, which aroused Japan's fears for herself; 
and the second from economic difficulties in Korea and 
China. 

Fourteen of these twenty wars can be seen at first 
glance to have been at least partly economic in their origin, 
for they have resulted from colonial expansion, which we 
have seen is due to economic needs; and since the war be- 
tween the United States and Spain was a result of the 
economically caused Cuban Insurrection, it, too, may be 
set down at once as having economic conditions at its root, 
without consideration of the economic interests of the 
United States in Cuba, which were officially avowed as one 
of the reasons for entering upon hostilities. To these, two 
more must be added : the Nitrate War between Chile, Peru, 
and Bolivia, which was avowedly a quarrel over territories 



50 The Economic Causes of Modern War 

in which valuable minerals existed, and the war of 1914- 
1918, the greatest and most terrible of all, presenting the 
most complex network of colonial rivalries, economic strug- 
gles, tariff discriminations, naval rivalries, efforts to secure 
raw materials, and other causes which have their roots in 
economics. Apparently, then, on cursory examination, 
sixteen of the twenty wars since the Congress of Berlin 
have had self-evident economic causes. 

In scrutinizing the origins of these wars, one by one, 
three groups of facts are to be determined: first, the sev- 
eral causes which contributed to each war; second, the 
existence of an economic motive for risking hostilities; and 
third, the importance of this economic motive in relation to 
the other causes. Frequently the underlying cause of hos- 
tilities does not appear directly, and a war appears to be 
solely the result of non-economic factors, until the imme- 
diate causes, upon further examination, are seen to be the 
outcome of trade rivalry or the desire to protect economi- 
cally important colonies, and hence, in their essence, eco- 
nomic. The first, taken in chronological sequence, is the 
Afghan War of 1878-1882. 

THE AFGHAN WAR, 1878-1882 

The two British wars in Afghanistan, the first in 1838- 
1842, and the second in 1878-1882, rose directly out of the 
rivalry of Great Britain and Russia in their colonial expan- 
sion. The Russian Empire had spread itself gradually 
across Siberia and southward at the same time that the 
British Empire was spreading through India and north- 
ward, so that collision came, as was inevitable, in Persia 
and Afghanistan, which lay as buffer states between the 
two expanding Powers. The comparison made by Lord 
Lytton just after his appointment as Viceroy of India, in 



The Wars of the World: 1878-1914 51 

a speech to an Afghan envoy, is very applicable, although 
scarcely calculated to soothe the feelings of the Amir of 
Afghanistan. The little native state, said the representa- 
tive of the British Crown, was in the predicament of "an 
earthen pipkin between two iron pots." 

The Afghan wars were wars of defense — defense of the 
rich British dominions in India against possible Russian 
aggression through Afghanistan, with no consideration 
whatever for the rights and preferences of the Afghan na- 
tion as to the role it was to play. They were the result 
of the colonial and economic rivalry then existing between 
two great and constantly expanding empires. They were 
fought to secure the safety of a rich colony which was 
necessary to the economic needs of Great Britain. 

Afghanistan lies in the hill country to the north, and 
through it, three passes open into India, of which the most 
important is the famous Khyber Pass. So long as Russia 
remained the enemy of Great Britain, the mere possibility 
of her establishing herself in Afghanistan was a direct 
threat to the safety of the Indian Empire; but although 
Russian intrigues looking to this result had long been in 
progress, they had met with no success. 

The Afghans are a proud and savage race of mountain- 
eers, fanatic in their adherence to the Moslem faith, bit- 
terly opposed to the presence of foreign influence in their 
country, good fighters; and the Amir, aside from the ir- 
regulars furnished by the hill tribes, had at his command, 
in 1879, an army of about 120,000 men. In 1838-1842 the 
British had attempted armed intervention in the internal 
affairs of Afghanistan, with a view to setting up in Kabul, 
the capital, a government which would be favorable to 
them. The attempt ended in almost complete failure and 
disaster. 



52 The Economic Caiises oj Modem War 

The international situation in 1878, after the Russian 
successes against the Turks and the Treaty of San Stefano, 
had further alarmed the British and had brought the 
Afghan question to a crisis. It was evident that a 
Russian onslaught upon India would come through 
Afghanistan if it ever came; but as to the best method 
of meeting it, there were two opinions. Military leaders 
and high ofl&cials of the Indian Civil Service had long held 
that the protection of the British frontier was best left in 
the hands of the Afghans themselves, who would certainly 
resent the presence in their country of a Russian invading 
force. The Russians would thus have to make their way 
through a mountainous country without railways, exposed 
not only to the attack of the regular Afghan army, but also 
to the forays of hill tribes, which, even when hostile to the 
Amir's forces, would join with them against a foreigner. 
After their own experience in 1838-1842, the British of- 
ficers were not disposed to underestimate the fighting quali- 
ties of the Afghan. The Russian invading army, then, 
could meet the British only after a long and difficult march^ 
and after waging with Afghanistan a war which might in- 
duce the Afghans to accept British assistance. It was felt 
by the exponents of this view that the effort to obtain a 
"strategic" or "scientific" frontier at the expense of Afghan- 
istan would be more than offset in its advantages by the 
hostility thus incurred among the natives, by the uncer- 
tainty of communications, and by the increase of the dis- 
tances between the British advanced posts and their bases 
in India proper. 

In the words of the distinguished British war correspond- 
ent, Archibald Forbes, who accompanied the troops in both 
campaigns: ^ 

* Archibald Forbes : The Afghan Wars, p. 162. 



The Wars of the World: 1878-1914. 53 

"The relations between Shere Ali (Amir of Afghanistan) and 
the successive Viceroys of India were friendly, although not 
close. The consistent aim of the British policy was to main- 
tain Afghanistan in the position of a strong, friendly, and inde- 
pendent state, prepared in certain contingencies to co-operate in 
keeping at a distance foreign intrigue or aggression; and while 
this object was promoted by donations of money and arms, to 
abstain from interference in the internal affairs of the country, 
while according a friendly recognition to the successive occu- 
pants of its throne, without undertaking indefinite liabilities in 
their interest. The aim, in a word, was to utilize Afghanistan as 
a 'buffer' state between the northwestern frontier of British India 
and Russian advances from the direction of Central Asia." 

About 1867, however, there began to creep in among 
army officers the notion that advanced posts in Afghanis- 
tan would be an advantage in meeting Russian attack. 
In general it met with little approval among professional 
soldiers in the Indian Army ; but the scheme did find favor 
in London with the members of the Cabinet, the Conserva- 
tive party being then in power, and became the subject of 
a good deal of Parliamentary discussion. In 1876 the pol- 
icy of a "scientific frontier" — which meant interference in 
Afghanistan — was introduced by the Beaconsfield-Salisbury 
Cabinet, and Lord Lytton went out to India with instruc- 
tions to abandon the former policy of "masterly inactiv- 
ity" as regarded the border. 

The occupation by the British of Quetta, on the frontier, 
and military preparations there, were quite naturally re- 
garded by the Afghans as the prelude to an invasion. While 
negotiations with the Amir were in progress, his envoy died 
and the British envoy, Sir Louis PeUy, was recalled by 
Lytton on the ground that the Amir was intriguing with 
the Russian General Kaufmann, at Tashkand, on the Rus- 
sian border of Afghanistan. Lord Sahsbury authorized the 
Viceroy to protect the border as seemed best to him, "with- 



54 The Eco7iomic Causes of Modern War 

out regard to the wishes of the Amir or the interests of 
his dynasty." After the Congress of Berlin the Russians 
were forced to give up the concentration of troops which 
had been begun on the Afghan border; but they profited 
by the estrangement from the British Government pro- 
duced by Lord Lytton's truculent policy, to send an em- 
bassy to Kabul, which was received by the Amir with open 
arms. 

The British demand that a mission from India should 
also be received at Kabul was refused and the envoys were 
turned back at the frontier. The Indian Government sent 
an ultimatum which, unless a favorable reply was returned 
by November 20, 1879, was to be followed by immediate 
hostilities. The Amir sent no reply, and three British ar- 
mies moved to the attack. Warfare continued until May 
30, when the Treaty of Gundamuk was signed, by the terms 
of which the British Government in India secured the stra- 
tegic frontier on the most exposed border of the most im- 
portant of the British possessions, for which it had been 
intriguing. Afghanistan, losing its character of an inde- 
pendent buffer state, became to all practical intents a de- 
pendency of the British Crown. The control of foreign 
affairs was vested in the British Government and the Amir 
consented to accept a British Residency and to guarantee 
its safety, the British in their turn pledging themselves not 
to interfere in the internal affairs of the native state. Three 
districts, together with the strategically all-important 
Khyber and Michnai Passes were ceded to Great Britain. 
Commercial relations between Afghanistan and India were 
to be encouraged and the Amir accepted an annual subsidy 
of 60,000 pounds. 

The treaty endured for a little more than three months 
before the Afghan hatred of the foreigner blazed out and 
the entire British mission was massacred. The second 



The Wars of the World: 1878-1914 55 

Afghan campaign, which ended with the British victory at 
Candahar, September 1, 1882, completely crushed the na- 
tive state, which was saved by the accession to power in 
England of the Liberal Party, pledged to reverse in most 
respects the foreign policy of their Conservative prede- 
cessors, of which the Afghan aggression was an integral 
part. Lord Lytton resigned as Governor-General of India. 
The Conservative Premier's scheme for an advanced fron- 
tier in Afghanistan, which had always had high military 
opinion against it, was abandoned at the very moment 
when the territory was in the hands of the British army. 
The Empire retained only the Pisheen and Subu Valleys, 
abandoning both the Khyber Pass and the Kuram Valley, 
after two costly campaigns, the expenditure of twenty 
million pounds sterling, and the loss of many lives, return- 
ing practically to the status quo ante and very nearly to 
the old policy of "masterly inactivity." 

In 1884-1885 the old question of the safety of India and 
the economic rivalry of the expanding imperial powers came 
very near to causing another war. Russia seized Penjdeh 
from the Afghans, and only the threatening condition of 
internal affairs in Ireland and South Africa prevented a 
British declaration of war. 

Should the Afghan War be regarded as an economic war? 
Directly, no. Indirectly, yes. It grew out of a frontier 
dispute, but it was fundamentally the result of the same 
need for economic expansion which originally led to the 
acquisition of India and which made its wealth essential to 
the British Empire. Had there been no policy of imperial 
expansion on the part of either Russia or Great Britain, 
which was, of course, the outcome of economic causes and 
in the deepest sense a true economic rivalry, there would 
have been no Afghan Wars. 

The wars in Afghanistan are results of the friction due 



56 The Economic Causes of Modem War 

to economic causes between Great Britain and Russia, 
which existed in the latter part of the Nineteenth and the 
first years of the Twentieth Century. This rivah-y ex- 
pressed itself in difficulties over Constantinople, intrigues 
in native states, and colonial expansion; but in every case 
the difficulties were the outcome of economic requirements 
— primarily a Russian effort to secure ports in warm water 
and to establish Slavic power over the waterway at Con- 
stantinople, blocked by English determination to protect at 
all costs the trade route to India and the land frontier of 
the richest of all colonies. Raw materials, notably the 
Baku oil wells, also came to be involved before the Anglo- 
Russian Agreement of 1907 finally removed the roots of the 
difficulty. 

THE ZULU WAR, 1879 

The Zulu War of 1879, which resulted in the pacifica- 
tion by force of the natives and the ultimate incorporation 
of Zululand with the colony of Natal, has been variously 
represented as a necessary measure of defense and as the 
violent extension of the imperial domains. In either event, 
it falls at once into the class of wars which have an eco- 
nomic motive in that they are the inevitable concomitants 
of colonial expansion; for wherever the white man, forced 
by economic need, spreads his rule into the more sparsely 
settled portions of the earth, he meets inevitably the re- 
sistance of the native population. Even though the war be 
regarded as necessary to the defense of Natal, it is still an 
outcome, though less direct, of the economic forces which 
originally occasioned the colony's establishment. Elimi- 
nate the economic need and you eliminate at a stroke both 
the colony and the problem of its defense. 

On the borders of the British colony of Natal lay the 



The Wars of the World: 1878-1914 57 

native state of the Zulus, ruled by its native king accord- 
ing to tribal customs. In 1873, after the close of a civil 
war among the Zulus, the king Cetewayo was induced, prob- 
ably with an eye to the material advantages of British 
friendship, to go through the form of accepting a tinsel 
crown from an English official. Between 1873 and 1879 
the Zulus were arming and organizing a drilled and disci- 
plined army. There was no conceivable enemy for the 
natives to fight except the British and therefore, after they 
had refused to yield to the British demand for disarmament, 
imperial troops were directed against them. The capture 
of the British camp at Isandhlwana and the desperate 
defense of Rooke's Drift were followed by a series of 
victories for the army commanded by Lord Chelmsford. 

The Zulus were quickly crushed, Cetewayo captured, and 
sent to St. Helena. He was allowed to return to his people 
four years afterward; and following a period of hesitation 
by the colonial administration, Zululand became a part of 
Natal in 1897. 

The war is typical of the type of hostilities that break 
out almost inevitably as the result of the spread of the 
white man, for economic reasons, into the territory of white 
or half savage races. Economic pressure in the colonizing 
country and the pressure of other European nations lead 
to an attempt to expand, which brings in its train the need 
for crushing by force the native races, unwilling to be dis- 
possessed. Even these little wars, then, are properly to 
be classed among those caused by economic pressure. 

THE NITRATE WAR, 1879-1883 

The desire of Chile to secure a share in the nitrate trade, 
of Bolivia to hold nitrate deposits in the Desert of Ata- 
cama, and of Peru to maintain her supremacy in the guano 



58 The Economic Causes of Modern War 

trade, explain the motivation of the Nitrate War, or War 
of the Pacific, which began with Chile's declaration of war 
on the other two republics, April 5, 1879, and ended with 
Chilean victory, in the Treaty of Ancon, October 20, 1883. 
The far-reaching and long-enduring character of the eco- 
nomic difiiculty and the way in which it tends to re-appear 
with each successive unsettlement of international relations 
is shown by the re-opening of this question in 1918 during 
the World War. 

The use of guano as a fertilizer in agriculture had been 
known to the prehistoric inhabitants of Peru, whose Inca 
rulers carefully regulated its collection and use. Specimens 
were first brought to Europe by Alexander von Humboldt 
in 1804. In the middle of the last century, it came into 
general use as a fertilizing material of peculiar value, being 
rich in nitrogenous and phosphate compounds, mainly de- 
rived from the long accumulation of the droppings of sea- 
fowl on South American coasts and islands where the cli- 
mate is dry and the rainfall slight. Until 1874 most of 
the Peruvian guano was obtained from the Chincha Islands, 
about twelve miles off the coast of Peru. Each of the is- 
lands, from five to six miles in circumference, was covered 
with guano deposits, to a depth of 200 feet, in successive 
strata ranging in thickness from three inches to a hundred 
feet. 

Guano thus formed the staple article of Peruvian export, 
and the largest single source of revenue, the exports rang- 
ing from $9,000,000 to $15,000,000 yearly in the years im- 
mediately before and after 1870.^ But two causes operated 
to reduce this highly profitable industry, on which the 
wealth of Peru largely hinged — the exhaustion of the de- 
posits, partly due to failure properly to protect the guano 

^Statesman's Yearbook, 1874, pp. 552-553. 



The Wars of the World: 1878-1914 59 

birds, and the discovery of other and cheaper sources of 
commercial fertilizers in the phosphate beds of the United 
States, the potash deposits of Germany, and the nitrate beds 
now owned by Chile. It was these deposits, now Chilean, 
which led to the Nitrate War. 

Nitrate of soda, known commercially as "nitrate" or 
"Chile saltpetre," comes from the rainless districts of Chile 
and Peru, and the largest deposits are found in the prov- 
inces which were the prizes of the war, Tacna, Arica, and 
Tarapaca. They are believed to be due either to the evap- 
oration of an ancient sea, or to be the saline residue of 
the evaporation of fresh water streams. Although exports 
from the few which were known had been made as early 
as 1830, the wide extent and enormous value of the de- 
posits were not realized until the latter half of the century. 

The beginning of difficulties that led to war was a dis- 
pute relative to the frontier between Chile and Bolivia, 
which at that time held a small strip of seacoast near 
Cobija, between 22° and 23° south latitude. While the re- 
publics had been Spanish provinces under the imperial 
colonial administration, the need of strict delimitation of 
the frontier had never been felt, and when they won their 
independence, the republican governments usually tacitly 
accepted the old boundaries. The Desert of Atacama, a 
stretch of arid territory lying along the Pacific coast be- 
tween 22° and 27° south latitude, had been the ill-defined 
boundary between the provinces of Peru and Chile under 
the Spanish regime; and when in 1825 the Republic of Bo- 
livia was created, it received the northern portion of the 
desert and the town of Cobija, in order that it might have 
access to the sea. The southern boundary of Bolivia was 
no more accurately located than that of the Spanish prov- 
ince had been, and the Chilean constitution of 1833 claimed 
merely land "from the Desert of Atacama to Cape Horn" 



60 The Economic Causes of Modern War 

— a northern boundary lying vaguely somewhere in a des- 
ert extending over five degrees. 

Undetermined as was the delimitation, it sufi&ced so long 
as the Desert of Atacama was believed to be waste land 
of no value; but in 1842, as the Peruvian guano trade grew, 
the Chilean government dispatched an expedition to ex- 
amine the coast and find out whether there was any guano 
in Chilean territory. Immediately after the explorations, 
Chilean vessels began surreptitiously loading guano in 
desert territory claimed by Bolivia. The Bolivians now 
asserted their claims to the desert and in 1866, after 
much disagreement, under the spur of the Spanish effort 
to win back the lost colonies, a treaty fixed the boundary 
at the 24° south latitude, but at the same time stipulated 
that the territory between 23° and 25° should be joint 
property of the two republics, the revenue on the mines 
and the guano and nitrate deposits to be equally di- 
vided. The Bolivian government undertook the collection, 
while full rights of supervision and inspection were accorded 
to Chile. 

Such an agreement speedily led to disputes and after 
more diplomatic correspondence, Chile in 1872 renounced 
her claims to revenue on condition that the safety of 
Chilean capital and of subjects engaged in the mines should 
be guaranteed. In 1874 this agreement was incorporated 
in a treaty. Most of the mines were actually being worked 
by Chilean capital and by Chilean labor. 

While the diplomats were busy, new nitrate deposits were 
discovered in the desert, which rapidly began to displace 
guano in the market. The effect on the guano trade of 
Peru was so unfavorable that in 1873 the Peruvian Govern- 
ment, in an effort to offset it, restricted the output of its 
own nitrate mines to 4,500,000 quintals (hundredweight) 
yearly, and proposed that both Chile and Bolivia should 



The Wars of the World: 1878-1914 61 

restrict their mines similarly, either by direct legal limita- 
tion or by the imposition of prohibitive export duties. 

This would have been highly favorable to the guano 
trade, but since that was of minor importance to Chile as 
compared with the trade in nitrate, the suggestion was 
refused. Bolivia also declined, maintaining the treaty 
obligations which prevented restrictions on the mines in her 
territory owned by Chilean subjects, under the agreement 
of 1874. 

In the same year, however, the government entered into 
a secret treaty with Peru, maintaining the interests of the 
two states against Chile.^ Efforts to bring the Argentine 
Republic into the coalition failed, although the relations 
between Argentina and Chile were strained then and for 
some years afterward over the Andes boundary question. 

While the Dictator Malgarejo was in power in Bolivia, 
the Compania de Salitre y Ferrocarril de Antafagasta (An- 
tafagasta Saltpetre and Railways Company), a Chilean 
corporation, secured from him a very generous conces- 
sion in the Desert of Atacama. The successors of the dic- 
tator, after his fall, sought to reduce this; and the taxes 
that they fixed upon the company drew diplomatic pro- 
tests from Santiago. The Bolivian Government had im- 
posed a tax of ten centavos per hundredweight on nitrate 
exported by the company, in lieu of the previous tax of 
ten per cent of the profits. The Chilean protest was based 
on the Treaty of 1874, which provided that there should be 
no increase in the taxes of citizens of Chile resident in 
Bolivia. The Bolivian Government yielded, but presently 
declared the concession of the powerful Antafagasta com- 
pany void, and ordered the confiscation of its property. 

*The text of this treaty is published twice in President Arthur's Mes- 
sage to Congress of 1882, Submitting Papers Relating to the War in South 
America, pp. 85 and 208. 



62 The Econojnic Causes of Modern War 

Chile presented a 48-hour ultimatum, and at its expira- 
tion debarked 500 troops at Antafagasta/ 

The Chilean army now occupied an advanced post on 
the Peruvian frontier and within easy striking distance of 
the important deposits of nitrate and guano in the Depart- 
ment of Tarapaca. The Peruvian Government immediately 
offered mediation between Chile and Bolivia. 

When the offer was first made, no suspicion existed in 
Chile of the alliance that had been formed between their 
economic rival and the mediating power; but rumors of 
the secret treaty led to a demand upon the government of 
Peru for a declaration of neutrality which forced admis- 
sion of the existence of a treaty which bound Peru to assist 
Bolivia. The war spirit had been rising in all three states. 
The Peruvian mediator had been received with marked hos- 
tility by the Chilean populace. Chile declared war with 
both Peru and Bolivia, April 5, 1879. 

The situation had been complicated by diplomatic ex- 
changes between Chile and Argentina over the Andes 
boundary question, which had led so close to war that the 
Chilean fleet actually steamed south towards the Straits 
of Magellan and was recalled on the settlement of the dif- 
ficulties with Argentina just in time to be turned against 
Peru. The war, after a few months land and sea fighting, 
was everywhere a Chilean victory. Chile mastered the sea 
after a six months struggle. The Chilean army drove the 
Peruvians out of the Department of Tarapaca, and in two 
engagements won Tacna and Arica, thus gaining control 
of practically all of the nitrate and guano fields. Neutral 

'It is said (Diego Barras Arana: Histoire de la Guerre du Pacifique, 
p. 50) that although President Doza of Bolivia received on February 
20 the news of the Chilean occupation of Antafagasta, he did not per- 
mit it to be made public until Ash Wednesday, six days later, when it could 
not interfere with the pre-Lenten carnival period. Only after that time 
did the Bolivian cabinet begin to plan a course of action. 



The Wars of the World: 1878-19U 63 

efforts at mediation failed. Chile, in actual possession of 
the nitrate deposits, demanded territorial concessions to 
which Peru would not yield. It was not until Lima was 
taken and the government overthrown that Chile finally 
attained her territorial aspirations. Bolivia, in a separate 
peace, gave up her seacoast. After a new government had 
been organized in Peru, the Treaty of Ancon ^ was signed, 
by which Tarapaca was ceded unconditionally, and Tacna 
and Arica for ten years, at the end of which a plebiscite was 
to be held. This has never been done and Chile still re- 
tains possession. 

The conquest has been of vast economic value to Chile. 
Prom 1879 to 1899, inclusive, the duty on the nitrate ex- 
ports alone was $557,033,576 in Chilean money and the 
value of the exports themselves $1,406,741,330.^ It has 
been estimated that from 1900 to 1935 the nitrate export 
duties will reach $1,656,200,000. Surveys by the Chilean 
government in 1899 showed sufficient nitrate in Tarapaca 
to permit the exportation of 1,400,000 tons a year for 
thirty-five years to come. 

The economic character of such a war is self-evident. 
The boundary question between Chile and Bolivia had ex- 
isted for a long time without ever having been seriously 
considered, much less leading to any signs of hostilities. It 
was only when the valuable mineral deposits were found 
that the states became sufficiently concerned over their 
boundaries to attempt to fix them, and the rivalry between 
the miners of Peruvian guano and Chilean nitrate fanned 

^ The text of this and the Bolivian treaty are to be found in The Ques- 
tion of the Pacific, by V. M. Maurtua and F. A. Pezet, p. 139 and p. 204, 
respectively. 

* These figures are based on Chilean statistics, but the calculations are 
by the Peruvian Alejandro Garland. With further amplifications they 
may be found in The Question of the Pacific, pp. 150-151. 



64 The Economic Causes of Modern War 

the flames. The questions discussed in the diplomatic 
interchanges that preceded the war were wholly economic; 
and the Antafagasta incident which precipitated hostilities 
at last, was a blow by Chile in defense of her nitrate 
interests. In the Treaty of Ancon, it was the possession of 
Tacna, Arica, and Tarapaca, with their nitrate deposits, 
upon which the victors were intent. 

THE BRITISH OCCUPATION OF EGYPT, 1882-1898^ 

"The origin of the Egyptian question in its present phase 
was financial," says the first sentence of Lord Cromer's 
Modem Egypt. The conclusion of the Governor-General 
is justified, for it rests on a more thorough acquaintance 
with Egyptian affairs than is possessed by any other man. 
The British occupation offers one of the clearest examples 
possible of the role played by economics and finance, and 
of the struggles and rivalries which grew out of them, in 
producing wars. The entrance of the British came about 
mainly because of the inability of the Khedive, Ismail 
Pasha, to meet the enormous debts in which he had in- 
volved himself through his extravagant luxury; but there 
are other reasons besides this for the British to be estab- 
lished in Egypt. One is directly economic, the need for raw 
materials, especially cotton, of which Egypt sends a million 
bales a year to the British textile factories, and which is 
equally desirable either to the French or to the German 
textile mills. The other is indirectly economic — the old 
story of the protection of the highways to India, which 
may be threatened through the economic jealousy of 
any power which holds Egypt. The Suez trade route 

^Though the actual occupation took place in 1882, these dates are 
made to include the subsequent fighting in the Sudan, which was the 
logical step following the occupation and intimately related to it. 



The Wars of the World: 1878-1914 65 

antedates the Canal, an overland road having been devel- 
oped and encouraged under British auspices, and discour- 
aged by the French, who looked upon it as tending to lessen 
the prospects of beginning the cherished project of their 
great engineer, de Lesseps. The British hold on Egypt is 
also a protection to the colonies elsewhere in Africa. 

British interference in Egypt dates from the Napoleonic 
wars, when the Emperor tried to use that land as a base of 
attack upon India and British trade in the Mediterranean 
— an attempt which was frustrated by Nelson's destruc- 
tion of the French fleet in the Battle of the Nile, and the 
crushing of the French army in possession of the country. 
England again interfered in 1807 to assist the Nationalist 
Party, but was defeated by Mohammed Ali, who had just 
forced the Sultan to recognize him as Pasha of Egypt. 

Ismail Pasha, whose extravagance at last compelled for- 
eign intervention, succeeded to the throne in 1863 and re- 
ceived the title of Khedive from the Sultan in 1867. Prior 
to his accession to the khedival throne, he had been living 
as a country gentleman with large landed estates, to which 
he was applying the most modern agricultural methods and 
from which he was deriving large returns. His habits of 
luxury and extravagance were such, however, that even 
when these profits were increased by the revenues of the 
Egyptian state, they were not sufficient. The tax rose un- 
der his rule from 40 to 60 piastres, coin by coin wrung out 
under the lash from the miserable fellaheen, who were fre- 
quently compelled to mortgage their petty properties to 
the money-lenders who invariably accompanied the tax- 
gatherers on their rounds. 

Finding the taxes insufficient, Ismail resorted to con- 
fiscation, in which indirect methods were necessitated by 
his fear of the intervention of European Powers. In an 
Oriental country the opportunities for coercion and intimi- 



66 The Economic Causes of Modem War 

dation are so extensive that within a few years Ismail, 
employing methods little better than barefaced seizure, had 
been able so to harass the owners of estates which he de- 
sired that they had been compelled to part with them for 
practically nothing. In this way he had come into per- 
sonal possession of about one-fifth of the land of Egypt. 

Confiscation was not so successful a method of increas- 
ing his income as the Khedive had hoped, for as his es- 
tates increased, the possibility of strict oversight of their 
management and accounts diminished, and he was so robbed 
on every hand by his own administrators that he found 
himself almost as straitened as ever. After a little pre- 
liminary negotiation with native money lenders and with 
Greeks in Alexandria, he turned to Europe for loans. 

The transactions were in the hands of Nubar Pasha, an 
individual quite devoid of scruple, who managed the busi- 
ness so adroitly that of the total of 96,000,000 pounds ster- 
ling that he borrowed, only 54,000,000 reached the Khedive. 
A great part of all this money was raised in Great Britain, 
largely through the agency of the English Rothschilds, es- 
pecially the loans after 1871, when French finance was con- 
cerned chiefly with paying off the Prussian indemnity. Al- 
though the money was borrowed in the name of the 
Egyptian government and became a part of the public debt 
of Egypt, almost all of it went to the private uses of the 
Khedive himself. 

In 1876 the debt aanounted to 89,000,000 pounds sterling, 
a tremendous sum for a country with only 6,000,000 popula- 
tion and with an area of only 5,000,000 acres under culti- 
vation.^ It must be remembered that until the British 
came, the area of Egypt watered by the Nile (the only 
arable portion) was comparatively small. Since that time 

^W. Basil Worsfold: The Future of Egypt, p. 44. 



The Wars of the World: 1878-1914 67 

the building of the Assouan dam and the creation of a 
scientific irrigation system have greatly increased the pro- 
ductive capacity of the country. 

In thirteen years, Ismail added nearly 86,000,000 pounds 
to the debt of the country, and had raised the tax rate 
many times. These taxes were levied directly upon the 
fellaheen, the native farmers, who were the only real pro- 
ducers of wealth in the country, from whom the money 
was wrung with the most systematic brutality. Never was 
a country so systematically and pitilessly drained of its 
wealth. Even the bits of gold which by native custom 
formed the chief treasure of every Egyptian woman were 
taken; the few small savings of the peasants were gobbled 
up by the rapacious collectors; and the helpless workers, 
man and woman alike, were set to work again, almost upon 
the level of slaves. 

Had even a portion of the money thus being recklessly 
borrowed abroad and extorted from the people at home 
been expended in public works, there would have been at 
least some defense for the khedival government, but this 
was not the case. With the exception of the Suez Canal, 
only about ten per cent of the loans ever went into the 
development of the country; and even the contribution 
of 3,000,000 pounds to the Canal was made only after arbi- 
tration by Napoleon III when the government had failed 
to carry out its contract to grant areas of land and to supply 
forced labor to the Canal Company. 

Evidently this state of affairs could not continue in- 
definitely. The country had been taxed to its capacity, but 
still it was a notorious fact that the revenue was not meet- 
ing the ordinary costs of administration and at the same 
time paying the interest on the money which the Khedive 
had borrowed in Europe and squandered on his private dis- 
sipations. 



68 The Economic Causes of Modem War 

The obvious thing to do was to proclaim openly the in- 
ability of the government to meet its obligations and leave 
the European creditors to make what terms they could. 
But Egypt was not an independent state. It was bound, 
first as a subject state of the Turkish Empire, and second, 
by the special treaties or "Capitulations" ^ which granted 
special rights or privileges to the subjects of various Euro- 
pean states when resident within Turkish territories. 
Since the government of the Ottoman Empire was on a 
plane not very much higher than that of Egypt, there was 
small hope that interference from above would straighten 
out the tangle; but in the agreements of the "Capitula- 
tions" the European Powers concerned, principally Eng- 
land, France, Austria, and Italy, had an excuse for inter- 
fering on behalf of their investors. 

The "Capitulations" had originally been entered into in 
order to protect the citizens of fourteen European Powers, 
and of the United States and Brazil, when resident within 
the Turkish Empire, from the maladministration of jus- 
tice by the native courts. An agreement with the Egyp- 
tian Government had about this time led to the establish- 
ment of a court which combined the authority of the 
various consular courts in tribunals of a new sort, known 
as the Trihunaux Mixtes, constituted by khedival decree on 
January 1, 1876, and given jurisdiction in civil cases as well 

*The first of these treaties was made with France in 1536 (renewed 
1673 and 1740), when the Turkish Empire was at the height of its powers. 
The second was with England in 1583, followed by others granted to 
Holland in 1613, Austria in 1718 (renewed 1784), and Russia in 1784. 
During the Eighteenth Century nearly every European Power secured a 
Capitulation, and during the Nineteenth Century the new states, Bel- 
gium, Greece, and the United States, also secured them. Though the 
treaties differ in minor details, their provisions are in general the same: 
liberty of residence, inviolability of domicile, liberty to travel, freedom of 
commerce and religion, immunity of local jurisdiction, and exclusive extra- 
territorial jurisdiction over foreigners of the same nationality. 



The Wars of the World: 1878-1914 69 

as in the criminal cases with which alone the consular 
courts had concerned themselves. The authority was to 
extend to cases at law between natives and foreigners. 

At the same time an effort by the Powers to ascertain 
the exact condition of the finances of Egypt — known to 
be unsatisfactory — led to the Cave Report, presented in 
March, 1876, incomplete but sufficient to demonstrate the 
need of international action of some kind in order to pro- 
tect the European creditors of Egypt by receiving as a 
whole, the revenues that the Khedive had set aside to meet 
the debt. With this object in view, the Khedive author- 
ized on May 2, 1878, the Caisse de la Dette, which was 
made up in the beginning of three officials representing 
France, Austria, and Italy. 

The concerted action of the Powers in establishing these 
two international authorities improved the situation so far 
as the creditors of Egypt were concerned, for not only was 
the revenue for the payment of the debt to be more hon- 
estly and efficiently administered; but in the future com- 
plaints which might be brought against the Egyptian Gov- 
ernment would be tried before a court which derived its 
authority not from that government itself, but from Eu- 
rope. This was the peculiar importance of the Tribunaux 
Mixtes. 

As the bad faith of Ismail became more and more ap- 
parent, England and France, which were most concerned 
in the Suez Canal and in the development of Egypt in gen- 
eral, interfered directly in the administration of the coun- 
try; and created the Goschen-Joubert mission to re-exam- 
ine the financial situation and find a way of paying 
off the debt. A plan was submitted in November, only 
to be found useless because of the deception practiced by 
Ismail, who had furnished false data. In 1878 the inves- 



70 The Economic Causes of Modern War 

tigation of a Commission armed with full powers to ex- 
amine every detail of Egyptian finance, including the 
sources of revenue and the methods of administration, 
showed clearly that Ismail would never be able to meet 
the obligations of the state. The Khedive having been so 
indiscreet as to attempt obduracy before the European 
proposals for reducing the interest due on the debt, was 
deposed by international action in June, 1879, and his son 
Tewfik Pasha put in his place. 

After Ismail had been deposed, England and France 
jointly assumed responsibility for the control of the na- 
tive government in Egypt, and Tewfik Pasha ^ was given 
to understand that no other Powers would be allowed to 
interfere. The recommendations which had been made by 
the Financial Commission were followed out and a Law of 
Liquidation was passed which remained in force, with 
slight modifications, made in 1885, until 1904. When the 
decree of the Khedive promulgated the new law with the 
approval of the governments of England, France, Austria, 
Germany, Italy, and Russia in 1880, it had been found 
that since 1876 the debt had been increased by nearly 
10,000,000 pounds, making a total of 98,376,660 pounds. 
This sum was divided into four debts, which stood at the 
following figures in 1881:- 

*In Moslem countries descent is ordinarily to the oldest living male 
member of the family, according to Turkish law. A Firman of the Sublime 
Porte, May 27, 1866, had substituted father-to-son descent by primogeni- 
ture, in the special case of the hereditary rulers of Egypt. 

^W. Basil Worsfold: The Future of Egypt, p. 50. Before the World 
War upset exchange values, the Egyptian pound was the equivalent of 
$4.94307 in American money, as compared with an equivalent value of 
$4.86656 for the pound sterling. The Egyptian coinage is used only in 
Egypt, and the pound is divided into 100 piastres of ten ochr-el-guereh, 
each of four paras. It contains 7.4375 grammes of fine gold as compared 
with 7.32238 grammes in the pound sterling. See V. Gonzales: Modern 
Foreign Exchange, p. 19. 



The Wars of the World: 1878-1914 71 



In pounds sterling 




In 


pounds Egt 


Capital Amount 


Rate 




Interest 


Privileged Debt ....22,587,800 


5% 




1,157,024 


Unified Debt 57,776,340 


4% 




2,253,265 


Domains Loan 8,499,620 


5% 




455,310 


Daira Debt 9,512,900 


4% 




370,322 



98,376,660 4,235,921 

In addition to these sums, Egypt was made liable to 
an additional sum of 1,000,000 pounds a year, called for by 
the tribute to Turkey, interest due England on the Suez 
Canal shares, and minor obligations not included in the 
Consolidated Debt. 

This arrangement left the Egyptian government with an 
annual income of less than 4,000,000 pounds above the 
charges, with which to carry on the business of the coun- 
try. The revenues and charges stood as follows:^ 

Total receipts from all sources 9,229,965 pounds 

Charges for debt and tribute 5,345,341 " 



Balance available 3,884,624 " 

By 1880, the sum of 1,000,000 pounds had been paid off 
the debt, but the sweeping economics and retrenchments 
necessary to accomplish this and the impossibility of re- 
lieving the taxpayers of their burdens, led to an identifica- 
tion in the popular mind of the Europeans with the Turkish 
oppressors, and the national movement, originally anti- 
Turkish, broke out in a fierce revolt against the Dual Con- 
trol. Headed by Arabi Pasha, the Egyptian Minister of 
War, and deriving support among the people from the wave 
of Mohammedan fanaticism soon to sweep the Sudan under 
the Mahdi, the rebellion reached such proportions that the 
khedival government and everything that the French and 
British had been able to accomplish, was threatened. 

^Ihid., p. 51. 



72 The Economic Causes of Modern War 

After a massacre at Alexandria in which fifty Christians 
were killed, the British fleet bombarded the city. On the 
22nd the Khedive dismissed Arabi from office and the min- 
ister promptly declared a Holy War on his own responsi- 
bility. Between August 3rd and 26th, the British took 
possession of the Suez Canal completely — the coveted di- 
rect route to India — and troops were sent in from Malta, 
Cyprus, India, and England. Lord Wolseley landed at 
Alexandria August 13th, proclaimed that he was there to 
uphold the authority of the Khedive, and on September 
13th crushed the Egyptian army at Tel-el-Kebir. Cairo 
was taken the next day and the British occupation had 
begun. 

France and Italy ^ had both declined to accept the invi- 
tation of Great Britain to participate; and the entrance of 
the British therefore put an end to the Dual Control, leav- 
ing the responsibihty for the administration of the state 
in their hands. The situation was further complicated by 
the fact that Egypt had during all this time been a subject 
state of the Turkish Empire, with which Great Britain at 
that time still desired to maintain friendly relations, in 
order to keep Russia out of Constantinople and away from 
the all-important route to India. 

The British occupation was declared to have been under- 
taken solely to "restore the authority of the Khedive"; 
but since the only authority left to that unhappy official 
had come to be exercised through the medium of the Dual 
Control, the occupation actually meant that henceforward 
Britain would rule in Egypt. The French were jealous of 

^ Italian popular sympathy at this time was all with the Egyptians, and 
an Italian legion was actually being raised by Menotti Garibaldi to aid 
the Egyptians in their struggle for freedom from foreign control. A 
decided coolness between the two states existed for several years after 
the occupation. 



The Wars of the World: 1878-1914 73 

British occupancy and continued to protest at intervals 
until the agreement of 1904. On January 3, 1883, Lord 
Grenville, then Minister for Foreign Affairs, addressed a 
communication to the Powers in which he said: 

"Although for the present a British force remains in Egypt 
for the preservation of public tranquillity. Her Majesty's Gov- 
ernment are desirous of withdrawing it as soon as the state of 
the country and the organization of proper means for the main- 
tenance of the Khedive's authority will permit of it. In the 
meantime, the position in which Her Majesty's Government are 
placed towards His Highness imposes upon them the duty of 
giving advice with the object of securing that the order of things 
to be established shall be of a satisfactory character and pos- 
sess the elements of stability and progress." 

A year later the Egyptian Government was given to un- 
derstand that the "advice" which it received from Great 
Britain must be regarded as compulsory. After this the 
position of Egypt was wholly anomalous, for the Khedive, 
though ruling a dependency of the Turkish Empire, and 
owning allegiance to the Sultan, could take no steps with- 
out the approval of the British. 

More war was to follow. The immense region to the 
south of Egypt, the Sudan, never very completely under 
khedival control, broke into revolt, the tribesmen having 
been inflamed by a religious leader who proclaimed himself 
a Mahdi or Savior. The inefficient force of Egyptian sol- 
diery together with a small British force under General 
Hicks was cut to pieces. In 1884 General Gordon, an Eng- 
lish soldier of eccentric magnetic quaUties calculated to 
appeal to the public, and of a great deal of experience in 
dealing with native tribes, was sent almost alone into the 
Sudan with the idea that he would be able to restore Brit- 
ish control. On his arrival at Khartoum he discovered that 



74 The Economic Causes of Modern War 

the situation was far worse than had been represented, and 
ahnost immediately afterward found himself besieged by 
the Mahdi and his fanatic dervishes. 

The popular voice in England demanded a relief expe- 
dition, but the government was so dilatory and hesitant 
that none was started until September, 1884. Pushing for- 
ward under great diflaculty, it reached Khartoum January 
28, 1885, two days after the city had been taken and Gor- 
don, with all his men, massacred. 

After this there was no more warfare in connection with 
the British occupation until 1896, the Sudan was aban- 
doned, and the occupation was confined to improving the 
financial, economic, and social conditions of the Khedive's 
dominions. In this year. General Sir Herbert Kitchener 
(afterward Lord Kitchener of Khartoum) was sent into the 
Sudan with 20,000 troops to reconquer it for the Khedive, 
a task which he accomplished after two years of fighting. 

That the colonial rivalries of France and Britain did not 
at this time result in war was due wholly to the internal 
political conditions of France, divided into two bitterly op- 
posed factions after the revelations of the Dreyfus trial. 
The French had, in the hope of taking advantage of con- 
ditions in the Sudan to round out their colonial domain, 
sent Major Marchand with only eight officers and one hun- 
dred twenty men from the Upper Congo, with orders to 
traverse the district intervening and stop at the Nile. Ac- 
complishing his mission successfully, the French officer ar- 
rived at the little town of Fashoda (the present Kodok) 
in July, 1898. Two months later Kitchener's army, fresh 
from its victory over the Mahdi, marched in from the south 
and raised the British flag not more than a thousand yards 
from the headquarters of Major Marchand. 

Asserting the authority of the Khedive, Kitchener di- 
rected Marchand to haul down his flag and leave the ter- 



The Wars of the World: 1878-1914 75 

ritory, to which the French commander repUed that he 
received his orders from his mihtary superiors and could 
not leave without their direction. The issue thus passed 
to London and Paris. The French ministry asserted that 
the Khedive had lost his rights in the Sudan by allowing 
the Mahdists complete sway for an entire decade, and that 
therefore Great Britain could have no claim. The English 
laid claim to the entire Nile Valley, in the name of the 
Khedive, and held that the suppression of the revolt by 
Kitchener's army constituted a full and valid claim to re- 
main in possession. Here was a clear case of the clash of 
colonial interests of two Powers, both led to seek expansion 
because of economic pressure at home. 

Popular opinion was aroused to a pitch which made war 
seem inevitable; but in the end France had to yield, and 
the respective spheres of influence were delimited by an 
agreement of March 21, 1899, which secured to the British 
an undisputed influence throughout Egypt. 

Until 1904, when England and France once for all ad- 
justed their colonial rivalries and ambitions, the French 
looked with jealous eyes upon the English occupancy, es- 
pecially as the land came more and more to be in fact a 
real possession of the British Crown, in spite of its nominal 
acknowledgment of Turkish suzerainty. After the agree- 
ment in 1904, this jealousy ceased, and France no longer 
asked embarrassing questions with regard to the reiterated 
British intention of leaving Egypt to itself. The British 
were in possession, and the British meant to stay. War 
with Turkey at last afforded an excuse for ending the fic- 
tion of dependence upon the Ottoman Empire; and Egypt 
at last became in name as she had been in fact for years, 
a dependency of Great Britain. 

The occupation of Egypt by the English, together with 
the fighting which it caused, first with the Egyptian army 



76 The Economic Causes of Modern War 

and later with the Mahdi and his followers in the Sudan, 
is clearly economic and financial in its origin, as Lord 
Cromer said. Undertaken as a means of settling the rival 
claims to payment of the creditors of the various coun- 
tries who were interested in the Egyptian Debt, it led to a 
permanent hold upon a country which aided England in 
the quest of raw materials for her textile industry — soon 
to be hard pushed by German rivalry — and made still more 
complete the jealous hold upon India which guarded it 
from dangerous economic rivals; and it facilitated the de- 
fense of other African possessions. The occupation is but 
one more in the long series of similar exploits to which Euro- 
pean states have been driven in their dealings with weaker 
nations because of their economic needs and economic ri- 
valries. 

SERBO-BULGARIAN WAR, 1885 

The wars and constant prospects of wars in the Balkans, 
which have kept Europe in a turmoil during the last half 
century and which contributed to the great catastrophe of 
the late war, are due very largely to racial, territorial, re- 
ligious, and political motives, but the economic element 
is not lacking. The Balkan states have fought because 
they liked to fight, because they were jealous of one 
another, because they sought territorial expansion in order 
to bring a single race under a single government of its 
own ; but they have not fought over colonies or trade routes, 
or spheres of influence, or naval bases. 

It has been the economic rivalries of other nations, find- 
ing expression in the Balkans, rather than economic rival- 
ries among the Balkan states themselves which have stirred 
up a large proportion of the trouble which has led to wars in 
this turbulent portion of the globe. 



The Wars of the World: 1878-1914 77 

The war between Serbia and Bulgaria in 1885 at first 
sight appears to have little to do with illustrating the 
economic causation of war. It arose through Serbian 
jealousy of the expansion of Bulgaria. At the Congress 
of Berlin, it will be remembered, the provisions of the 
Treaty of San Stefano, which gave Eastern Rumelia to Bul- 
garia, were withdrawn, and Bulgaria was restricted to nearly 
her old boundaries. In 1885 the Rumelians, who were Bul- 
garian by blood and restive under Turkish rule, and who 
had long been desirous of amalgamation with Bulgaria, 
arrested their Turkish governor-general and issued a proc- 
lamation declaring the union of the two Bulgarias. Prince 
Alexander, hesitating to defy Turkey, was at length pre- 
vailed upon not to follow his first inclination to seek the 
Sultan's consent; and, yielding to the evident wishes of his 
people, marched to Philippopolis and declared it a part of 
his kingdom. 

Turkey at first threatened war, and Greece and Serbia 
began to mobilize. The latter state was at first believed to 
be preparing- to attack Turkey, and it was not until 
a very short time before the opening of hostilities that the 
Bulgars realized that King Milan was in fact preparing 
to make war upon them. The enlargement of Bulgaria by 
the addition of Rumelia had been so great that the other 
two states felt that they would be outshadowed unless they 
also received territorial compensations. Certainly the new 
Bulgaria was large enough to deprive Serbia of any pre- 
tensions to hegemony in the Balkans that she may have 
entertained. 

The war was very brief. When it was realized at Sofia 
that a Serbian attack was imminent, troops were hurriedly 
sent to the border. On the 14th of November, 1885, the 
Serbians advanced across the frontier, forced the Dragoman 
Pass on the 15th, and reached the plain of Sofia on the 



78 The Economic Causes of Modern War 

16th. In the meantune, a large part of the Bulgarian army 
had been held on the Turkish frontier to await develop- 
ments, until the Sultan made it clear that he did not intend 
war. From the 17th to the 19th the Battle of Slivnitza 
raged, at the end of which the Serbians were driven off 
with heavy losses. At the end of the battle, fresh troops 
from Rumelia came up. The Serbians were swiftly pur- 
sued, the Dragoman Pass retaken, and the last stand of the 
invaders crushed at the Battle of Picot, November 26-27th. 
The next day, as the victorious Bulgarians were beginning 
to carry the war into Serbia, the Austrian minister to Bel- 
grade appeared with an armistice agreement, and the inti- 
mation that Austria was prepared to come to Serbia's as- 
sistance if the Bulgarians did not grant peace. The war 
ended. 

This brief conflict is not so free from economic rivalry 
as at first appears. The Austrian desire to protect the de- 
feated Serbians was largely due to the fear of Bulgarian 
success as a probable expansion of the Russian sphere of 
influence in the Balkans, where the Dual Monarchy was 
even then finding some of her most valuable markets. Ser- 
bia, moreover, was one of the most exclusively Austrian 
markets and as such had a distinct claim upon the larger 
state at that time. Thus even in the welter of racial and 
religious hatreds in the Balkans, economic factors find a 
place. 

THE ABYSSINIAN WARS OF 1887 AND 1896 

The two wars waged by Italy in an effort to establish a 
colonial empire in Africa at the expense of Abyssinian inde- 
pendence are economic wars, as colonial wars must always 
be. They are the outcome of the fierce economic rivalry 
of Europe which found its expression in the mad scramble 



The Wars of the World: 1878-1914. 79 

for colonies, following the opening up of Africa so rapidly 
that Italy presently found herself with a grave overpopula- 
tion problem, while most of the territory of the world 
available for expansion was rapidly being pre-empted. 

The Abyssinian wars are unsuccessful wars and they are 
the outcome of an unsuccessful colonial policy which had, 
up to 1906, cost the state a total of 17,591,567 pounds ster- 
ling, with comparatively little return. 

While the partitioning of Africa had been in progress, 
Italy had looked on with longing eyes, until in 1884 an 
indirect intimation was given by the British Foreign Of- 
fice that Italian occupation of territory on the littoral of 
the Red Sea would not be opposed. Secured on land by 
the power of the Triple Alliance and at sea by the prom- 
ise of British support, Italy felt safe in putting into 
effect a colonial policy of her own, born of the desire to 
share in the economic rivalry and colonial profits of the 
great Powers of the world. 

In 1885 two points were occupied, Beilul and Massowa, 
with the British man-of-war "Condor" standing by to ob- 
serve and report what went on, but in opposition to the 
advice specifically given to the Italian Consul-General in 
Egypt by Lord Cromer. Encroachments on Abyssinian 
territory called forth protests from the Ethiopian King 
John and in 1887 500 Italian soldiers were wiped out by 
the Abyssinians at Dogali. A punitive force of 20,000 sent 
out from the colony accomplished little, suffered much 
from fever, and was at length recalled. When King John 
died in 1889, Italian influence was promised to Menelik of 
Shoa, one of the aspirants to the crown, in return for his 
favor; and Italy, feeling secure in her new possessions, 
established the new colony of Eritrea. Victories over the 
natives followed at Agordat in 1893, Cassala in 1894 and 
Senafe in 1895. The continued encroachments of the Ital- 



80 The Economic Causes of Modern War 

ians were rousing resentment among the Abyssinians, so 
that by the end of the year, large native armies were threat- 
ening the outposts of the colony, a force of 2,350 Italians 
had been routed, and the garrison at Makala was forced 
to surrender. 

In the Battle of Adowah, March 1, 1896, General Bara- 
tieri, governor of the colony, was completely defeated by 
King Menelik, with a loss of nearly 5,000 killed, including 
two generals, and more than 1,500 captured. 

Italy was unable to make further attempts against the 
integrity of Abyssinian territory and in 1906 an agreement 
between France, Great Britain, and Italy finally settled 
the limits of the colony. All in all, Italy's colonial ven- 
ture has been a failure economically, having served none of 
the purposes of a colony and having cost dearly in blood 
and in treasure. 

Eritrea does not attract the Italian emigrant, for of the 
300,000 inhabitants only 2,800 are Europeans. It does not 
produce revenue, but on the contrary drains the treasury 
at a rate of about 320,000 pounds a year.^ The exports and 
imports are not sufficient to be profitable. 

Although the economic ends of the Italian colonial wars 
prior to the occupation of Tripoli in 1911 were not achieved, 
the causes of the wars remain clear enough. Italy sought 
economic expansion with the same motives and the same 
methods as the other European Powers, and though the 
Italians failed in their attempts in Abyssinia, their eco- 
nomic motives remained to find expression later in the more 
successful war in Tripoli. The unfortunate Abyssinians who 
died defending their native country were merely a few more 
natives suffering because of the need for economic expan- 
sion among European states. 

* Cambridge Modem History, vol. xii "The Latest Age," p. 271. 



The Wars oj the World: 1878-1914 81 

THE FRENCH WARS IN ANNAM, 1882-1885 

The desultory warfare which went on intermittently be- 
tween the French colonial troops and the natives of Annam 
between 1874 and 1882 was a natural result of the French 
penetration of this country in their effort to build up and 
strengthen the Indo-Chinese colonies. All Europeans had 
been expelled from Annam in 1824; but the conclusion of 
the Anglo-French campaign in China, which ended in the 
Treaties of Tientsin in 1858, offered excuse for a second 
expedition for the capture of Sagon, where the French es- 
tablished themselves in 1859, employing it as a base for the 
spread of their power through the rest of Indo-China. 

Fighting with the Annamese in 1873 resulted in a treaty 
in the following year, made without reference to the suze- 
rain power of China, which promised toleration of mis- 
sionaries and the internal peace of the country. Further 
difl&culties of the missionaries provided a convenient ex- 
cuse for the extension of imperial boundaries, with the 
result that in 1882 French troops again interfered. 

The Chinese unofficially encouraged irregular troops 
known as the "Black Flags" to aid the forces of the An- 
namese; and as the French came to realize this, their pro- 
posals were made both directly to Pekin and to the 
Annamese, in the first case for the cession of the southern 
part, and in the latter for the cession of all of Tonkin. 

The treaty was finally concluded with the Annamese, but 
without approval from the Chinese imperial government, 
which eventually repudiated it entirely. French troops at- 
tacked the city of Sontai in spite of warning that the Chi- 
nese would regard this as an act of war. Ahnost immedi- 
ately afterward, the invaders also seized the towns of Hanoi 
and Haiphong. The Annamese now renewed their war 



82 The Economic Causes of Modern War 

against France, while negotiations for peace with the Chi- 
nese were progressing. 

An agreement had been reached and peace was believed 
to have been secured when a misunderstanding with regard 
to the frontier between French and Chinese troops pre- 
cipitated an engagement in which the French were defeated. 
A fleet promptly blockaded the coast of Formosa and fired 
upon Chinese vessels at Foo-Chow. The French repre- 
sentative at Pekin retired to Shanghai, while Chinese forces 
were pouring into Tonkin. The French were finally victo- 
rious, and a protocol signed April 4, 1885, gave France a 
protectorate in Tonkin and charged her with the mainte- 
nance of order there. 

Until 1896 the French Indo-Chinese possessions were a 
useless burden and a heavy drain on the exchequer of the 
republic ; but with the appointment of M. Doumer as Gov- 
ernor-General, reforms began which placed the colony on 
a sound financial basis. The foreign trade increased be- 
tween 1893 and 1902 from 162,000,000 francs to 400,000,- 
000 ; and the share of this which France received grew from 
30,000,000 or less than a fifth, to 148,000,000 or more than 
a third.^ 

This petty colonial war is another example of the ex- 
tension by force of arms of the boundaries of an industrial 
state for economic ends. In Annam the expansion met 
with eventual success, although at first apparently doomed 
to a failure similar to that of Italy in Abyssinia. It is the 
first of the four wars in the Far East since 1878, in all of 
which the effects of economic pressure either in Europe or 
Japan are to be seen. 

* These figures are from the Cambridge Modern History, vol. xii, The 
Latest Age, p. 528. 



The Wars of the World: 1878-1914 83 

CHINO- JAPANESE WAR, 1894-1895 

Jutting out between the Japan Sea and the Yellow Sea, 
the southern extremity of Korea approaches so close to 
the Mikado's territory that a powerful enemy, once estab- 
lished there, may absolutely and completely dominate 
Japan, since whoever holds Korea can in a few hours trans- 
port his troops across the narrow strait for the invasion 
of the islands. A naval Power, moreover, established in 
Korea, dominates the Yellow Sea and the Sea of Japan, 
and is able to select its time and hour to strike at any 
place along the Japanese coast. The peninsula is there- 
fore, in the hackneyed phrase, "a dagger pointed at the 
heart" of Japan; and its possession is indispensable to 
Japanese security. 

But the economic importance of Korea to the expanding 
island Empire far exceeds the military, for Japan, since the 
awakening, has afforded a perfect example of the effects 
of increasing population, followed by food shortage, excess 
of production, and the consequent demand for territorial 
expanse with a view to securing foodstuffs, raw materials, 
markets, and room for colonial territory to relieve the sur- 
plus population of the fatherland. Korea offered the most 
logical ground for the expansion of the Island Kingdom. 
It offered, too, a stepping-stone to Manchuria and the limit- 
less Siberian wheat fields beyond. Its geographical posi- 
tion made it practically a part of the chain of islands which 
constitute the Mikado's dominions. It offered room for 
colonization, it was rich in natural resources, and it was 
inhabited by a gentle race easily to be dominated by the 
sturdy and vigorous islanders who coveted it. There 
were 3,185,000 acres of cultivated land, and 3,500,000 acres 
arable but as yet not under cultivation. The crops could 



84 The Economic Causes of Modern War 

be increased 150,000,000 yen by the application of scientific 
methods, and could support an additional population of 
from five to six millions/ Such a land was a tempting 
prize for any Power, and especially to a nation gradually 
beginning to feel the need for expansion. 

This was the logic of the situation as it began to be clear 
to the leaders of the Japanese in the years before the Chi- 
nese War and as it became increasingly clear during the 
years between that first conflict and the death grapple with 
the Russian Bear. 

The Chinese Empire laid claim to suzerainty over Korea. 
As in Annam, this suzerainty had been asserted with vary- 
ing degrees of strictness, but had come to amount to little 
more than the sending of tribute to the Chinese capital. 
Indeed, Korea had at one time acknowledged the suze- 
rainty of China and Japan simultaneously and had contin- 
ued still to submit to the government of her native em- 
perors! 

Realizing the weakness of the Koreans, the Japanese in- 
sisted upon treating with them as with an independent 
state, since it would be perfectly possible to coerce the 
native government into granting whatever trading priv- 
ileges were desirable and probably eventually to find pre- 
texts for interfering with the internal affairs of the penin- 
sula and assuming the reins of government. All of this 
was impossible so long as the Hermit Kingdom was for- 
mally recognized as a tributary of the Chinese Empire. 

Shots fired upon a Japanese naval vessel engaged in 
survey of the Korean coast had in 1875 afforded excuse for 
interference, but the opportunity was finally allowed to 
pass, although in the following year a treaty of friendship 
and commerce was signed. In 1884 an attack by native 

^K. Asakawa: The Russo-Japanese Conflict, p. 27. 



The Wars of the World: 1878-1914 85 

Koreans (whose intense dislike for foreigners extends even 
to other members of the Mongolian race) upon the Japa- 
nese legation, led to the dispatching of Japanese troops 
to the kingdom, an example which China promptly fol- 
lowed, with a view to asserting her authority and safe- 
guarding her own interests. On April 18, 1885, the 
Treaty of Tientsin was ratified, by which China was 
brought to admit the independence of Korea and to agree 
to send no more troops into the country without sending 
notification to that effect to the Japanese Government, 
which had already accomplished its main object in the 
recognition of Korean independence. 

In the years intervening between this treaty and the 
war, a number of incidents occurred which served to fan 
the flames. In 1889 the action of a Korean governor of 
the province of Haingyondo cut off the export of rice to 
Japan, which was no longer capable of providing all her 
own foodstuffs and had become partly dependent on for- 
eign supply. The removal of this restriction, which had 
been the outcome of anti-foreign sentiment, and the pay- 
ment of a claim of 110,000 yen in 1892 averted further dif- 
ficulties at the time; but in 1894 the murder of Kun 
Okkiun, a Korean political exile who had found refuge in 
Shanghai, the conveyance of his body and the murderer 
to Korea on a Chinese vessel, together with the enthusias- 
tic reception by the Koreans of the murderer and the in- 
sults offered to the body of his victim, stirred up feeling 
between the two nations still further. In the same year 
began the Tonghak movement in Korea, riots by anti- 
foreign natives with which the government was unable 
to cope. 

The Chinese Resident offered the help of his government's 
army to the Koreans and the troops began to move in; 
but, following the provisions of the Treaty of Tientsin, the 



86 The Economic Causes of Modern War 

Japanese Government was promptly advised. The Chi- 
nese troops were disembarked June 8, 1894. By the 
11th Japanese troops were also on the way. China having 
refused to join in insisting upon internal reform in Korea, 
Japan on the 20th of July presented the Korean Govern- 
ment with an ultimatum demanding numerous changes. 

Hostilities with China followed almost immediately, pre- 
cipitated by the firing by Japanese war vessels upon Chinese 
ships. There followed in quick succession Japanese vic- 
tories at Assan, at Ping Yang, the naval victories of the 
Yalu, the fall of Port Arthur, and of Wei-hai-wei, 

Negotiations for peace began March 5, 1895, and the 
Treaty of Shimonoseki was ratified May 8th, of the same 
year. By the terms of this treaty, Korean independence^ 
was again specifically recognized, an indemnity of 200,000,- 
000 tales was to be paid to the Japanese, and trading privi- 
leges in China were granted them. Most important of all, 

^ The Official Account of the Russo-Japanese War prepared by the Ger- 
man General Staff, sums up succinctly the Japanese economic aims in this 
war and the advantages to Japan of Korean independence: "Having 
dropped her timid seclusion from the outer world, Japan, sooner or later, 
was bound to assert her authority also abroad. The growing weight of 
taxation arising from the expenditure for civil sei'vice, for the army, and 
for the navy, and her rapidly increasing population, forced Japan to find 
new markets beyond the limits of her island empire, and room for the 
employment of her surplus population. For this purpose no country was 
more favorably situated than Korea; ancient connection and tradition 
pointed to that country. ... In the face of Korea's helplessness and 
China's weakness, it was sure not to be difficult for Japan to jockey an 
independent Korea according to her own sweet will, and to monopolize 
Korean trade by virtue of her advantageous geographical position and the 
ability of her merchants and tradesmen." English edition, pp. 3-4, Lieu- 
tenant Karl von Donat, translator. 

Thomas Cowen, an English journalist long resident in the East and 
familiar with the statesmen of Japan, attributed to Marquis Ito the fol- 
lowing summary of the conflicting claims of China and Japan in Korea: 
"The claims of China over Korea were historical only — i.e., as the his- 
tory of China reckons Korea among her tributaries and as China had the 
greatest repugnance for changing the face of history as the worthy legacy 



The Wars of the World: 1878-1914 87 

the Island of Formosa, the Pescadores, and the Liao-Tung 
Peninsula, including Port Arthur, were ceded to Japan. 

Nothing could show the economic motives of the war 
more clearly and specifically than the terms of this treaty, 
every one of the important provisions of which was of an 
obviously economic character. Japan had now secured most 
of the objects on which she had set her heart. An indepen- 
dent Korea could easily be overawed to such an extent that 
the Japanese could secure any concessions that they might 
desire as regards trading privileges, immigration for the 
relief of the congested population, and the supply of raw 
materials. 

From this time dates the Japanese monopoly of Korean 
trade, which grew rapidly prior to the Russian war and has 
increased enormously since then. The Chinese merchants, 
who had withdrawn during the war, were speedily replaced 
by enterprising subjects of the Mikado. The Chinese in 
Korea were never again one-tenth so strong numerically, 
as they had been before the war, and after its close their 
commercial ventures were confined almost entirely to the 
silk import trade on the west coast.^ 

Moreover, a first step had been taken which might ulti- 
mately open the way to annexation of Korea. The addition 
of Formosa and the Pescadores served the territorial and 
commercial aggrandizement of the Empire, and the acquisi- 
tion of Port Arthur was of the very highest importance for 

of ancestral emperors, so she was intent on claiming Korea as her vassal 
state. The claims of Japan over Korea were economical — i.e., she did not 
claim any regal authority over Korea; but from her geographical posi- 
tion and the necessitj^ of providing for her constantly increasing popula- 
tion, she was intent on utilizing Korea as the best source from which 
the defect in the home product of rice was to be supplied as well as the 
nearest field in which the future sons of Japan might find employment." 
See Thomas Cowen: The Russo-Japanese War. The italics are my own. 
' K. Asakawa : The Russo-Japanese Conflict, p. 15. 



88 The Economic Causes of Modern War 

winning and holding economic and military supremacy in 
the Far East. Its possession implied the power of Japan 
to checkmate any of the European Powers which were con- 
testing for the supremacy in the East. Not only did it 
check the expansion of Russia, but it gave the Japanese 
themselves abundant opportunity for expansion into Man- 
churia, and, if the time should ever come, for the seizure 
of Korea. To hold Port Arthur meant to possess a base 
for attack upon both coasts. Most important of all, the 
Power that held Port Arthur was in the best possible posi- 
tion for winning the dominant influence in China, for 
securing the lion's share of Chinese commerce and of the 
exploitation of natural resources; and for preventing that 
complete partition of the Chinese Empire among European 
Powers which would be fatal to Japanese hegemony and 
which Russian expansion was making more and more prob- 
able within the next decade or two. 

Precisely because it was so important to Japanese su- 
premacy that the flag of the rising sun should float above 
Port Arthur, it was equally important to the European 
Powers which were rivals for economic privileges and influ- 
ence in the Orient that it should not float there. If Japan 
were once to establish herself in this stronghold, her oppor- 
tunities for mastering the trade of the Far East surely 
would be such that her European economic rivals would of 
necessity fall behind. Russia, France, and Germany, there- 
fore, united in "advising" Japan to return it to the Chinese 
and to accept an increase in the amount of the indemnity 
by way of compensation. 

This action on the part of the Powers, whose economic 
rivalry with Nippon was supported by greatly superior 
armaments, coming at the moment of triumph of a proud 
nation which had for the first time proved its capacity for 
using the new methods of western warfare, precipitated a 



The Wars of the World: 1878-1914 89 

storm of fury throughout the island Empire. In every 
class the nation had been permeated with the ambition to 
win hegemony in the East, and the importance of retaining 
Port Arthur was as clear to every one as were the motives 
of the three European nations in withholding it. 

The Japanese press, which even then shared many of the 
less desirable characteristics of the American newspaper, 
published many bitter articles.^ Pamphlets attacking the 
Powers and demanding retention of the port, appeared on 
every hand. Only a country thoroughly under police con- 
trol could have avoided being swept into war by the sheer 
weight of popular excitement; and as it was, the newspaper 
censors worked overtime. Newspapers were suspended right 
and left, but new ones sprang up in their places to reiterate 
their patriotic utterances until they, too, were suppressed. 

The Mikado's government had to yield and knew it, for 
Japan was not yet ready to meet western nations in a trial 
of skill with western armaments. Yield they did, but from 
that time on, every Japanese knew that the struggle was to 
be between Russia and Japan for the trade and supremacy 
of the Far East, since it was Russia which was held respon- 
sible for the joint action of the three governments. 

There followed an orgy of territory-grabbing by European 
nations which served to show the keenness of the economic 
rivalry that had come to exist among states which felt the 
pressure of their industries behind them, in their efforts to 
find new portions of the earth to exploit. More and more 
Japan became convinced of the dangers of her position from 
the military as well as from the economic point of view, 
realizing that it was only her proved power which spared 
her the fate of helpless China. Germany secured Tsing- 
Tao, France Kuang-chan-wan, Great Britain the whole of 

* A detailed account of the popular excitement may be found in Thomas 
Cowen's The Russo-Japanese War, p. 34. 



90 The Economic Causes of Modem War 

the Kowlung Peninsula, north of Hongkong/ and then 
upon the Japanese evacuation, Wei-hai-wei. The bit- 
terest blow that the pride of the Japanese in their achieve- 
ments ever received was the subsequent negotiation be- 
tween China and Russia giving to the latter state not only 
trading rights in Manchuria which made her a still more 
serious economic rival, but also that very coveted position 
in Port Arthur from which the Japanese themselves had 
been driven by Russian diplomatic maneuvres only a short 
time before. After that there was no thought of anything 
but war with Russia, and a continuous, determined prepa- 
ration for that conflict when its day should come. 

THE BOXER UPRISING, 1899-1900 

The Boxer Rebellion is commonly represented in the 
West as an outburst of fanaticism due to accidental infringe- 
ment by Europeans upon ancestor worship and similar 
Chinese "superstitions" and to resentment of the activity 
of the missionaries; so that the Relief Expedition which 
marched to Pekin is thought merely to have put down an 
unjustified and brutal native rising. 

Not only is this view wide of the truth, but it neglects 
entirely all the underlying and some of the immediate 
causes of the outburst initiated by the Chinese society, the 
"Fists of Righteous Harmony." It does not do justice to 
the painfully real grievances of the Chinese and it repre- 
sents altogether too glowingly the altruistic motives of the 
European Powers, whose economic rivalry and greed in 
seizing everything Chinese upon which they could lay 

* Great Britain secured Hongkong by treaty in 1842; a foothold of 
about five miles on the Kowlung Peninsula in 1860; and the whole 
peninsula in 1898. 



The Wars oj the World: 1878-1914 91 

hands had had a great deal to do with provoking the out- 
break. 

The extent to which economic causes were operative as 
well as their importance, can be seen with perfect clear- 
ness by a study of the international situation in the Far 
East between the Treaty of Shimonoseki and the begin- 
ning of the Boxer troubles. 

If there were cynics among the statesmen of the Chinese 
Foreign Office, they must have reahzed at once that the 
compulsion exercised upon Japan to secure the evacuation 
of Port Arthur was not prompted by disinterested concern 
for the integrity of Chinese territory. Scarcely had the 
Japanese departed when the economic rivalry of the Powers 
of Europe began to show itself and their demands began 
to be heard. First in the field was Russia, suggesting a loan 
to the Chinese Government to be applied to the payment 
of the Japanese war indemnity. Loans, when they cannot be 
met by disorganized native governments, offer admirable 
excuses for seizing territory; and if the governments do 
prove able to meet their obligations, the loans are still 
beneficial to the financiers who arrange them. That was 
why the Tsar generously offered to help the Chinese pay the 
war indemnity imposed by Japan. The loan was one of 
400,000,000 francs, at 4 per cent., and was sufficient to pay 
half of the indemnity. It was arranged nominally through 
the Russo-Chinese Bank, which was thus brought into 
prominence and which soon extended through Siberia and 
the Far East, maintaining thirty branches and serving as a 
cloak for the commercial schemes of the Russian Govern- 
ment. 

In 1897 two obscure German missionaries were most 
opportunely killed by the Chinese. Germany promptly 
landed troops and seized the bay of Kiao-Chau on the coast 
of the Yellow Sea, the operations being commanded by the 



92 The Economic Causes of Modern War 

same Admiral von Diedrichs who later encountered Dewey 
at Manila. Just what connection this had with making 
reparation to the families of the dead missionaries is not 
quite clear; but at any rate Germany had obtained a foot- 
hold which was the beginning of her share in the economic 
struggle in the Far East and of further exploitation of the 
country. China was browbeaten into leasing, with full 
rights of sovereignty, the bay and contiguous territory to 
Germany for a period of ninety-nine years, within which 
time many things could (and did) happen. Established in 
the principal port of the province, Germany immediately 
began a process of penetration by means of railways and 
mining concessions. 

In 1898 announcement was made that the Russian fleet 
had received "permission" to winter at Port Arthur, then 
in Chinese hands, and in the following May, under threat 
of hostilities, China ceded Port Arthur and Dalni, the 
strategically and economically highly important tip of the 
Liao-Tung Peninsula. There was an ominous silence from 
the Japanese Foreign Office, but a frenzy of indignation 
broke out anew among the people of Japan. 

In the meantime. Great Britain and France, far from 
seeking to maintain the integrity of the helpless Chinese 
Empire, had themselves been seeking their share of the 
spoils. Great Britain, not content with her recent acqui- 
sitions, Kowlung and Wei-hai-wei, now demanded a pledge 
from China that the Yangtse Valley should never be ahen- 
ated to any other power, and thus secured the dominance of 
British commercial interests in that fertile region. Japan 
made similar demands as regarded the widely separated 
provinces of Fukien and Amur. 

In April, just before Russia had secured Port Arthur, 
France handed in her demands — nothing less than a ninety- 
nine year lease of Kwang Chau for use as a coaling station. 



The Wars of the World: 1878-1914 93 

railway rights to Yunnanfui from Tonkin, and a promise 
not to alienate to any other power the provinces of Kwan 
Tung, Kwangsi, Yunnan, or the Island of Hainan, and, 
finally, further extension of French rights in the vicinity of 
Shanghai. The last demand was of particular gravity in 
its consequences because, with characteristic European in- 
difference to native beliefs, the lines proposed interfered 
with a native cemetery and therefore with the peaceful re- 
pose of the ancestors worshipped by the Chinese of Shang- 
hai. This was one of the incidents which particularly en- 
raged the native populace. 

The Chinese Empire consists altogether of eighteen 
provinces. Thirteen of these had now been invaded by the 
foreigners, among them the most populous, the most 
wealthy, and the most desirable — holding within their 
borders the most important waterways, harbors, mines, 
and all of the economic centres to which foreign commerce 
could gain access. 

In view of all this aggression, which was purely the out- 
come of the economic rivalry existing among European 
nations, it is at least comprehensible that the Chinese were 
maddened with hatred of the foreigner. The war with Japan 
had been brought on by the Manchu Government, and since 
most of it had been fought in Manchuria, a district which 
was peculiarly their own, the great mass of the inhabitants 
of the Empire had regarded it with comparative indifference 
as a concern of the dynasty rather than of the Chinese. 
Until very recently, indeed, patriotism in the sense in 
which a Westerner thinks of it was not known in China; 
but these demands of the foreign powers were spread 
throughout the country and affected every one. 

Besides the irritation produced by foreign intrusion in a 
nation which for years had sought to keep to itself, there 
were other causes of dissatisfaction. The burden of taxa- 



94 The Economic Causes oj Modern War 

tion to meet what remained of the indemnity and the 
interest of the Russian loan with which one-half had been 
paid, was crushing. The economic balance in China, al- 
ways in a rather precarious state, was disturbed by two 
years of bad weather with consequent bad crops, and added 
to the complexity of the financial situation. Thousands 
were reduced to the verge of famine; rebellion, brigandage, 
and piracy increased; and many of the malcontents went 
over to the growing Boxer Society, attributing their woes 
wholly or in part to the foreigner. 

Even the patience of the government began to give out, 
so that when in 1899 Italy — always belated in the colonial 
field — put in a claim for a coaling station at Sanmun on 
the Chekiang coast, together with a railway and mining 
grant in the province, she met with blunt refusal. The 
Italian Government hesitated to use force, and so desisted, 
the more so as these efforts were looked on with disapproval 
by the Powers already secure in their own possessions. 

When, shortly after his accession, the new Emperor began 
to show a tendency to adopt the methods and ways of life of 
the hated "foreign devils" — who had shown themselves 
devilish enough in their greed and unscrupulousness, 
Heaven knows! — and actually issued a series of edicts 
intended to make sweeping reforms throughout the state, 
it was too much. The Dowager Empress, by a coup d'etat, 
put herself at the head of the government, by a polite 
fiction exercising her sway through the Emperor, and gave 
covert encouragement to the Harmonious Fists. In 1899 
the Society broke into open violence, tortured and killed 
missionaries and converts in great numbers, and in the sum- 
mer of 1900 laid siege to the foreign legations in Pekin. 
American and Japanese troops had served to check the 
progress of the Boxers somewhat, and the besieged lega- 
tions were finally relieved by an expedition composed of 



The Wars of the World: 1878-1914 95 

Japanese, French, German, Russian, American, and British 
forces. 

The rising havmg been finally suppressed and peace re- 
stored, the Powers imposed an indemnity upon China, and 
entered into an agreement for the mutual maintenance of 
Chinese integrity from that time onward, and for the pre- 
vention of further European encroachment upon her ter- 
ritory. 

The whole rebellion was one more case of protest by the 
natives of a weaker land against exploitation at the hands 
of foreigners. It was territorial aggression and economic 
greed growing out of European rivalry which lay at the 
root of the trouble, and the contributing difficulties, 
friction with missionaries, ancestor worship, and the rest, 
were merely the immediate occasions. 

''Of all immediate causes of this last upheaval of China 
against the Occident," says Clements,^ "these aggressions 
were the most important factor. Had they never occurred 
it is doubtful whether there would have been a rebellion." 

European greed had attained to such a pitch that every 
possible way of extorting profit from the helpless native 
government was employed. Engrossed in their own rival- 
ries, the states of Europe had paid scant heed to the suffer- 
ing and natural resentment of the Chinamen. Commercial 
servitude, loss of sovereignty, the forcible extortion of 
ninety-nine year leases, foreign dominance in their finest 
harbors, the hj^othecation of the likin and salt revenues, 
special contracts and concessions to foreign promoters, the 
eternal talk of partition, diplomatic wrangles and demands 
for "spheres of influence," indemnities demanded on grounds 
which no European Power would have thought of tolerating 
if applied to itself, — these were some of the forms in which 

^Paul H. Clements: The Boxer Rebellion, p. 26. 



96 The Economic Causes of Modern War 

the economic hostility of the Great Powers appeared to 
China. It was this that the Chinese resented in war, a 
war which must be laid at the door of the ambition for 
economic expansion of the great nations of the world. 

THE RUSSO-JAPANESE WAR, 1904-1905 

The conflict between Russia and Japan is the result of the 
clash of their economic interests, purely and simply. The 
growing population and industry of Japan required more 
than the Korean territory for which the Chinese war had 
been fought. Manchuria was needful also. But Russia 
likewise sought to expand in Korea and Manchuria. It 
was necessary for her to do so for various economic reasons 
— to possess more natural resources, to win a larger place 
in the markets of the Orient, and to secure ice-free ports. 
It was necessary for Japan to expand in the same direction. 
The growth of her population and her manufactures, and 
her need for food supplies and for markets made this im- 
perative. It was because of these things that the Japanese 
dreamed of supremacy in the East. It was life and death 
to them that they should be supreme. 

Other incidents which fanned popular hatred and led 
on to war were the outgrowths of this fundamental eco- 
nomic clash. The Japanese desire to retain Port Arthur 
in 1895 was not primarily military or naval; it was rather 
economic — a way in which to begin expansion in Manchu- 
ria, a way to Korea, and most of all, a way to halt the 
Russian rival. For exactly the same reasons, Russia desired 
the stronghold. When she could, she took it from China 
by threat of war. When Japan in her turn was strong 
enough, she, too, took it from Russia by force of arms. 

Japan, it is true, desired to prevent the partition of 
China, but this desire was economic in its origin, certainly 



The Wars of the World: 1878-1914 97 

not altruistic. The partition of China amons; the Great 
Powers, towards which Russian policy was obviously tend- 
ing and which would have favored Russian economic in- 
terests, would have ended the Japanese hopes of expan- 
sion. What happened in Shantung when the Germans 
secured Tsing-tao gave fair warning of what might be 
expected throughout China if the powers once divided it 
among themselves; and Russian expansion in Manchuria, 
without opposition, made it fairly clear that in the end 
China would be divided unless somethmg happened to put 
an end to the encroachments of the Slav. Japan's object 
was to delay the partition until she was herself strong 
enough to prevent it by force. 

The gradual development of Russian power in Eastern 
Asia can be traced from the Seventeenth Century, but 
none of the lands then acquired served to satisfy the coun- 
try's greatest economic need — ports free from ice the year 
round. This has always been the principal difficulty in 
the way of the more complete development of Russian com- 
mercial possibilities. The Baltic ports, which open com- 
mercial relations with the states of Scandinavia and central 
Europe, and an outlet (always under the possibility of Ger- 
man control) to the Atlantic, are few in number and are 
ice-bound part of the year. Archangel, to the north, is six 
months choked with ice, and Vladivostok to the east is 
only a little better. In the south, Russia has ports on the 
Black Sea, but all this commerce must pass back and forth 
under the perpetual menace of the Dardanelles. The foreign 
trade of southern Russia exists only by virtue of the whims 
of the Power that holds Constantinople. 

The logical step for Russia was to secure possession of 
the straits, which have for centuries been in the hands of 
the gradually decaying Ottoman Empire. Economic and 
naval considerations made its possession extremely desirable. 



98 The Economic Causes of Modern War 

for not only did all the commerce of the south of Russia 
pass this way, where it could be cut off at any time, but the 
Turkish rule closing the passage to all warships, bottled up 
the Black Sea fleet and prevented the exertion of Russian 
naval power in the Mediterranean, except after a very long 
voyage from the Baltic. But British economic and naval 
considerations stand in the way. Constantinople, it cannot 
be too often repeated, lies on the trade route to India. 
British wealth measured in millions passes back and forth 
within easy striking distance along that route. It is an 
artery in which flows the very life blood of the British 
Empire. Great Britain will never permit a strong Power 
to establish herself there. The impotent Turk? Well and 
good. But Russia? Never. 

Through all the centuries the great mass of Slavs, the 
largest population in Europe, literally numberless, inhabit- 
ing a country of rich natural resources with hundreds of 
miles of the best farming land, have remained closed 
up within a country which has no ports. Blocked to the 
north, west, and south, the trend of the Russian has per- 
force been towards the east. For the Slav, too, there has 
been a Drang nach Osten. Vladivostok, the Mistress of 
the East, was a beginning, but it was not enough, for even 
this port is not ice-free, and Russia must touch warm water 
somewhere before her economic future can be assured. 
In her Asiatic as in her European politics, this one motif is 
ever-recurrent. In one form or another it is continually 
turning up. 

The occupation of Saghalin, to the exclusion of Japan, 
is but the following out of this policy, but it was further 
south, to the Yellow Sea, that Russian ambition really 
turned. Along these coasts, in warm water, there were 
several ports through which Russian enterprise might build 
up a commerce that would make the Slav supreme in the 



The Wars of the World: 1878-1914 99 

Far East and bring to his country a boundless wealth.^ 
In Korea there were Gensan, Mansampo, an ideal naval 
base, and Chemulpo; and in Manchuria, Port Arthur, 
Dalni, and Tei-hen-wai. To secure one of these only, 
would be success; to secure all of them would be a triumph ; 
and towards these ends Russian policy was directed steadily 
until the defeat which Japan had long been planning put 
an end forever to Slav dreams of eastern hegemony. 

Russia had secured Vladivostok in 1860 and had secured 
at the same time the cession from China of a slip of coast 
extending from the province of Amur to Korea. In the 
following year an attempt to occupy the Straits of Tsushima 
was foiled by the British. The southern part of Saghalin 
was taken in 1875 and in 1885 an effort was made to secure 
Port Lazarev in Korea, while British attention was being 
distracted by a diversion along the Afghan frontier. 

The beginning of the Trans-Siberian Railway in 1891, 
an enormous undertaking, was one of the most important 
steps in carrying forward the Russian trend to the East. 
The Tsar's government now used its influence at Pekin, 
enhanced since the interference with the Japanese at Port 
Arthur, to gain the right to run the railway across Chinese 
territory in a straight line to Vladivostok, instead of taking 
the more circuitous northern route. Not only did this 
measure make the line shorter and the cost of construction 
less, but it practically assured to the Russians the control 
of a strip of territory roughly 800 by 400 miles in extent, 
since the existence of the railway without military protec- 
tion was not to be thought of, and since the opportunities 

* General Kuropatkin, writing after the war, said, "The question of 
obtaining an outlet on the Pacific Ocean was discussed in Russia some 
time ago. It was thought that an exit to ice-free seas would eventually 
be a necessity in view of the immense growth of our population." The 
Riissian Army and the Japanese War, p. 146. 



100 The Economic Causes of Modern War 

of exercising authority were greatly increased by the com- 
ing of the railway. In 1896 Japan suggested the delimita- 
tion of Russian and Japanese spheres of influence, Russia 
to have Manchuria and Japan Korea; but the Tsar's gov- 
ernment declined to accede. Two years later Russia 
acquired Port Arthur, under the circumstances already de- 
scribed, thus administering the bitterest blow possible to 
Japanese pride. 

The humiliation of the Japanese quite aside, this action 
opened a new source of friction in that Russia now wished 
to connect Kwan Tung in which Port Arthur is situated, 
with Vladivostok, 600 miles to the north. Manchuria 
and Korea, through which the proposed line would have to 
pass, thus acquired a new interest. 

In spite of the extensive immigration of Japanese into 
Korea that had been going on for some years, a lively com- 
merce with Japan, and the presence in the Hermit Kingdom 
of Japanese troops detailed to guard the legation and tele- 
graph line from Fu-san to Seoul, Russian influence spread 
more and more. Russian officers and civil servants began 
to find temporary employment; and in China a large com- 
mercial organization was formed, with Russian officers at 
the head, to exploit the timber on the lower Yalu. 

During the Boxer disturbances, Russia found a further 
opportunity for extending her influence by sending troops 
into Manchuria to protect the Trans-Siberian Railway 
where it crossed Chinese territory and for the suppression 
of revolts which might spread across the frontier. Alarmed 
by the Anglo-Japanese defensive alliance of 1902, Russia 
concluded an agreement with France in the same year, and 
then in order to strengthen her favor at Pekin and avoid 
conflict with other European Powers, drafted a treaty with 
China for the withdrawal of the troops in Manchuria, at 



The Wars of the World: 1878-1914 101 

the same time guarding sufficiently against the exploitation 
of the province by other nations. The withdrawal was pur- 
posely carried out so slowly as to be practically non-effec- 
tive. 

By the end of the year 1902 the strength of the Japanese 
army and navy was so increased that the Foreign Office 
felt secure in adopting a bolder front. Up to this time the 
patience of the Japanese had been so great as to be ominous, 
had it been interpreted aright. Now, however, with a 
strong army and navy ready to strike instantly, and with a 
treaty with Great Britain which would operate to prevent 
a repetition of the European intervention which followed 
the Treaty of Shimonoseki, Japan was ready for the war 
which her statesmen had long recognized as inevitable. 

In July of 1903 the Japanese Foreign Office commenced 
negotiations with Russia for the regulation of affairs in 
Korea, where the economic rivalry of the two Powers was 
most obvious, and also in Manchuria, demanding recogni- 
tion of the independence and inviolability of both China 
and Korea, recognition of the preponderating influence of 
Japan in Korea, and Russia in Manchuria, limitations of 
the troops of both powers in their respective territories, 
and an open door for Japan in Manchuria and for Russia 
in Korea. In order to gain time while the last section of 
the railway around Lake Baikal was being completed, 
Russia delayed her answer. Japan stood firm while Russia 
sought to evade the issue. Proposals and counterproposals 
passed, while the Russian troops in the East were being 
increased in number, and the concessionaires on the Yalu 
pushed their work. Realizing that her military preponder- 
ance was being jeopardized and that time was precious, 
and forced, moreover, by the warlike spirit of the people, 
Japan demanded a definite date for a reply to her last 



102 The Economic Causes of Modern War 

proposals, responding to further Russian efforts at tem- 
porizing by the recall of her ambassador. 

Without the formality of a declaration of war, Japanese 
war vessels delivered an attack at Port Arthur, while simul- 
taneously, General Kuroki's army landed in Korea; and 
for the first time a modern army of an Asiatic Power was 
pitted against that of a European Power. The Russians 
were driven back on the Yalu, were besieged in Port 
Arthur, defeated at Liao-Yang, and again at Mukden. At 
sea the Port Arthur fleet, the Vladivostok fleet, and the 
Baltic fleet were successively destroyed. 

The terms of peace, which were concluded at Portsmouth, 
New Hampshire, September 5, 1905, gave Japan the 
territory necessary to her economic development, the pos- 
session of Port Arthur, and revenge for the European inter- 
vention of two years before, together with the Russian 
lease of the Liao-Tung Peninsula, the Russian railways in 
lower Manchuria, and the southern half of the Island of 
Saghalin. 

With her supremacy in the East assured, Japan was 
enabled to caiTy through the economic program which she 
had mapped out, quite as ruthlessly as any European Power. 
Insurrections in Korea led at length to the abolition of the 
kingdom in 1910 and the estabUshment in its stead of the 
Japanese Province of Chosen. The acquisition of Shantung 
as a result of the Treaty of Paris has carried out almost to 
the full the economic development desired by the states- 
men of Japan. 

The series of wars in the Far East is plainly the out- 
come of economic conditions, and the final conflict which 
definitely established Japanese hegemony, is evidently due 
to the direct clash of two rival policies of expansions made 
necessary by economic pressure. Even when we include 
among the motives of the Japanese the fear of being swal- 



The Wars of the World: 1878-1914 103 

lowed up and made a colony in the process of Russian 
growth, European economic need, real or fancied, is still 
the cause. The war broke out because of the existence of 
two sets of economic purposes which from their very nature 
led to conflict. 

If confirmation of the economic character of these wars 
were needed, it would be found in the events which fol- 
lowed. The war with China had resulted in the practical 
expulsion of Chinese merchants from Korea. The second 
war was followed within five years by formal annexation, 
which added political domination to the economic penetra- 
tion that had amounted to nearly the same thing, in the 
years succeeding the victory of the Mikado's forces. As 
Chinese economic interests had been ended in the provinces 
that Japan had marked for herself, so were the Russian. 

Slowly at first, but none the less steadily (and in the 
years succeeding annexation, much more rapidly) infiltra- 
tion of Japanese settlers into the old Kingdom of Korea, 
which now became the new province of Chosen, began to 
relieve the overcrowding of the growing populace at home. 
In 1895, immediately after the Chinese War, there were 
but 10,463 Japanese in Korea. ^ Gradually their number 
increased, until immediately after the war with Russia there 
were from 40,000 to 50,000. After the war immigration 
grew at the rate of from 20 per cent, to 39 per cent, annually, 
until in 1918 there were 20.6 Japanese to every square ri 
(5.95501 square miles, or 15.42347 square kilometres) and 
they formed 1.87 per cent, of the total population. In 
other words, each square ri in Japan had contributed about 
twelve persons to each square ri in Korea.^ In the city of 
Seoul alone, one-sixth of the population was Japanese and 

^Statesman's Yearbook, 1897, p. 731. 
"Japan Yearbook, 1918, p. 684. 



104 . The Economic Causes of Modern War 

the total number there equalled all those in the country 
before the Russo-Japanese War.^ 

Comparison of the statistics of Japanese immigration and 
those of other countries during the years immediately 
before the World War and the first two years after, leaves 
no doubt as to what was occurring: ^ 

Year Japanese Other Nationalities 

1912 243,727 16,589 

1913 271,591 17,439 

1914 291,217 18,025 

1915 303,659 17,100 

The efficiency of the Japanese administrators, merchants, 
and technical experts resulted in an enormous improvement 
of the handling of the natural resources of the country, 
particularly after the formal occupation. The foreign trade 
of the country grew from 59,000,000 yen in 1910 to 131,000,- 
000 in 1917.3 

A few years before the Chinese War the shares taken by 
the various countries in the import trade of Korea stood as 
follows: Great Britain 57 per cent., Japan 19 per cent., 
China 12 per cent., Germany 8 per cent., other states 4 per 
cent.^ The defeat of China and the growth of industry, 
joined with the enterprise of the Japanese, speedily changed 
all that. At the outbreak of the war with Russia, Japan 
had gained approximately a third of the import trade 
and was receiving almost all of the exports. By 1914, 
290,000 tons of iron ore were being taken each year 

^Statesman's Yearbook, 1916, p. 1113. This authority adds: "There 
has been a large immigration of Japanese into the Peninsula of recent 
years and a considerable exodus of Koreans into the neighboring Russian 
and Chinese territory." 

''Japan Yearbook, 1918, p. 684. These are Japanese figures, compiled 
by Professor Y. Takenob of Waseda University. 

'Charles H. Sherrill: Have We a Far Eastern Policy? p. 179. 

^Statesman's Yearbook, 1892, p. 442. 



The Wars of the World: 1878-1914 105 

from the Korean mines all used by the Government 
Steel Works at Wakamatsu, which will eventually rely upon 
Korea for half its raw material. The Korean production 
of such rare but important metals as tungsten and molyb- 
denum all go to Japan. ^ Even in 1901 and 1902 this devel- 
opment of commercial relations was going on rapidly, as is 
indicated by the following table : ^ ' 

In pounds sterling: 

Total Korean Japanese Total Korean Japanese 

Year Exports Share Imports Share 

1901 1,080,345 970,663 635,085 247,624 

1902 1,130,429 1,041,395 695,020 280,843 

How far Japanese trade has progressed since the annexa- 
tion, the following table demonstrates: ^ 

In yen: 

Total Korean Japanese Total Korean Japanese 

Year Exports Share Imports Share 

1910 19,913,843 15,378,643 39,782,756 25,348,085 

1911 18,856,955 13,340,551 54,087,682 34,058,434 

1912 20,985,617 15,369,009 67,115,447 40,756,013 

1913 30,878,944 25,022,544 71,580,247 41,214,749 

1914 45,667,340 29,421,949 53,606,448 39,865,572 

1915 49,492,000 40,900,000 59,199,000 41,535,000 

1916 56,801,000 42,964,000 74,456,000 52,459,000 

1917 83,774,000 64,725,000 102,886,000 72,096,000 

1918 154,189,148 137,204,875 158,309,363 117,273,413 

In trade and in immigration, in the export of her manu- 
factured goods and the import of food and raw materials, 
and in the gradually increasing outlet of her population, 
Japan's Korean policy demonstrates the economic pressure 
that forced the Empire on to her successful wars. 

^ Japan Yearbook, 1918, pp. 692-693. 

* British Diplomatic and Consular Reports, Annual Series, No. 2999, p. 8. 
Quoted by K. Asakawa: The Russo-Japanese Conflict, p. 16. 

^ The statistics, from 1910 to 1912, inclusive, are from the Japan Gazette, 
p. 329; from 1913 to 1914, inclusive, from the Statesman's Yearbook, 1915, 
pp. 1105-1106; from 1915 to 1917, inclusive, from the Japan Yearbook, 
1918, p. 689; and for 1918 from the Statesman's Yearbook, 1920, p. 1033. 



106 The Economic Causes of Modern War 

THE BOER WARS, 1880-1881, 1899-1902 

Analysis of the causes of the Boer War of 1899-1902, and 
of the less important war that preceded it, is difficult be- 
cause of the complexity and variety of the factors involved., 
The more ardent British patriots have denied any ambi- 
tions on the part of their country, whether economic or 
imperial, and have presented the war as the outcome of 
a simple desire to secure justice and the Transvaal citizen- 
ship and franchise for their oppressed fellow-countrymen/ 
If this claim is to be admitted, we have the remarkable 
spectacle of a great state warring with a smaller state in 
order to enable its own subjects to divest themselves of their 
native citizenship and take up that of the hostile state! 

On the other hand, distinguished British economists have 
asserted (did, indeed, assert while the war was still in 
progress) that the Empire was being made a catspaw for 
a selfish group of financiers who were promoting their own 
financial interests at the expense of the two nations.^ The 
fact that there existed throughout the war a strong English 
pro-Boer party, which included some of the most eminent 
living Englishmen, serves to give color at least to this belief, 
and to indicate that the causes of the war were far from 
being idealistic. 

^Sir Arthur Conan Doyle (The Great Boer War, p. 26) says: "Our 
foreign critics with their misapprehension of the British colonial system 
can never realize that whether the four-colored flag of the Transvaal or 
the Union Jack of a self-governing colony waved over the gold mines 
would not make the difference of one shilling to the revenue of Great 
Britain." 

* J. A. Hobson in a volume {The War in South Africa, p. 197) published 
while the war was still in progress, declared: "We are fighting in order to 
place a small international oligarchy of mine owners and speculators in 
power at Pretoria." In a later passage he returns to his theme: "This 
war is a terrible disaster for every one else in England and South Africa, 
but for the mine owners it means a large increase of profits from a more 
economical working of the mines and from speculative operations." 



The Wars oj the World: 1878-1914 107 

Undoubtedly the economic factor did enter to a large 
degree, and, as I shall presently show, undoubtedly it was 
the underlying, if not the immediate cause of the war. It 
is equally true, of course, that the British citizens, like all 
the miners resident in the Transvaal, were suffering from a 
discrimination which the most thoroughgoing pro-Boer 
could scarcely have regarded as either just or fair. 

We may outline four general theories of the causation 
of the war, after which a survey of the undisputed facts 
in the case should enable us to choose between them. These 
theories are: 

1. That the Transvaal was the actual if not the apparent 
aggressor, and that it was probably instigated by jealous 
Continental powers, especially Germany, with possible 
promises of assistance which did not materialize. 

2. That the British Government was deliberately used by 
financiers and mine-owners in the Rand, and driven forward 
by a popular rancor which was deliberately created by 
interested persons. 

3. That imperialistic motives prompted Great Britain 
to round out her South African dominions by the forcible 
inclusion of the two Boer states, which by geographical logic 
belonged with the British colonies there. 

4. That both governments handled a complex interna- 
tional situation clumsily, misunderstood and distrusted 
one another, and so blundered into a situation from which 
neither could extricate itself without war. 

It will be observed at the outset that the first three of 
these motives for war are directly or indirectly economic. 
The jealousy of European powers, which certainly did en- 
courage the Boers, was largely over colonial matters, which 
have already been shown to have their roots in economic 
rivalries. The deliberate use of the government's war 



108 The Economic Causes of Modern War 

power by the financiers is patently and obviously economic, 
and the theory that imperialistic ambitions prompted 
Britain to the crushing of the Boer states is equally eco- 
nomic in its ultimate origin, since economics hes at the base 
of modern imperialism. Only if we are willing to believe 
that pure and simple blundering on the part of both gov- 
ernments, embittered by racial hatred, was the whole cause 
of the war, can we escape the entrance of economics, in some 
form or other, into the Boer War. 

The Boers, or Afrikanders as they had come to call them- 
selves, were the descendants of Dutchmen who had settled 
in South Africa in the Eighteenth Century and had been 
reinforced by a few Frenchmen, Huguenots or emigres 
driven out of France by the political and religious disturb- 
ances there. In 1836-39, in order to escape the incoming 
British, they had retired further into the heart of Africa, 
in what was known as the Great Trek, and had established 
themselves without any formal state organization. In 1877 
their territories were annexed by the British and the change 
in their status was quietly accepted. In the latter part of 
1880, however, enraged by the non-fulfillment of promises 
made them when the British took possession, the Boers rose 
and — defeating at Majuba Hill the few troops that could 
be gathered against them — threw off British sovereignty 
completely in 1881. 

It is said that the Boers when they took possession of 
their new lands, soon came to realize the value of the gold 
deposits there, but that they concealed their knowledge 
from the rest of the world, in order that they might con- 
tinue the peaceful agricultural life to which they were 
accustomed, and avoid the incursion of Uitlanders which 
was certain to follow if the existence of these very rich 
deposits should become known. 

Diamonds had been discovered in South Africa between 



The Wars of the World: 1878-1914 109 

1867 and 1871, and as early as 1879 Lord Wolseley had 
prophesied that extensive gold fields would eventually 
be found in the Transvaal. Five years later the accuracy 
of his judgment was proved by the discovery of immense 
quantities of precious metal in the mountains of the Trans- 
vaal known as the Rand, and during the next two years 
(1884-86) as exploration and prospecting was carried fur- 
ther, the deposits were gradually found to be of greater 
and greater richness. 

Uitlanders — the term applied by the Boer inhabitants 
of the Transvaal and the Orange Free State to all non- 
Boers — poured in from all sides. Most of them were 
British, but all nationalities were represented among them. 
The Boers bitterly resented their presence, in spite of the 
greatly increased wealth which the gold mines — in almost 
every case worked by Uitlanders — brought to their state. 
The rate at which this increase in revenue to the state 
proceeded may be seen from the following table, which 
begins a few years after the gold craze and continues 
almost to the outbreak of the war: ^ 

In pounds sterling: 

Year Revenue Expenditure 

1889 1,577,445 1,201,135 

1890 1,229,060 1,386,461 

1891 967,191 1,350,073 

1892 1,255,829 1,188,765 

1893 1,702,684 1,302,054 

1894 2,247,728 1,734,728 

1895 3,539,955 2,679,095 

1896 4,807,513 4,671,393 

1897 4,480,217 4,394,066 

This revenue was derived almost wholly from the gold 
mines, a large proportion in direct taxes and the rest in 
indirect; and as the Uitlanders owned almost all of the 

^J. A. Hobson: The War in South Africa, p. 84. 



110 The Economic Causes of Modern War 

mines they soon found themselves paying seven-eighths of 
the taxes to support a state in which they had no repre- 
sentation. They demanded the franchise, which was the 
last concession in the world that the Boers were prepared 
to give, since the great numbers of the Uitlanders would 
have given them control of the state which the Boers felt 
that they had carved for themselves out of Africa, and 
which they thought should belong to them in perpetuity. 

The exasperation of the Uitlanders at this denial of what 
they regarded as their political rights was accentuated by 
the fact that whilst Britishers in the two Dutch republics 
were denied the franchise, the Dutch residents of the British 
colonies enjoyed political equality; and since the colonies 
had been placed on a self-governing basis in 1872, and their 
Dutch population outnumbered the English, the Boers were 
able to run the government to suit themselves. The novel 
situation was in this way presented of a Dutch majority 
ruhng a British minority in British territory and a Dutch 
minority ruling a British majority in Dutch territory! 

British exasperation grew when later legislation made it 
increasingly clear that the Boers had no intention of ever 
granting any share in the government to the newcomers. 
The requirements for naturalization were made more and 
more strict, so that, whereas previously two years' resi- 
dence had been sufficient to qualify for citizenship, in 1882 
this was raised to five and in 1890 to fourteen years. 

In addition to these fundamental grievances, the Uit- 
landers had others — an alleged corruption in the Boer Gov- 
ernment, which certainly was very slack ; the fact that they 
possessed no control over the type of education given their 
children; the denial of a free press; the denial of the right 
of public meeting; disability from jury duty; and harassing 
of the mining interests by special legislation directed against 
them. Besides all this there was the perpetual problem of 



The Wars of the World: 1878-1914 HI 

native labor, which the Boer sanction of the liquor traffic 
among the blacks made increasingly difficult. 

The Dynamite Monopoly offered another cause of griev- 
ance, more fancied than real, but sufficient to inflame the 
indignation of the Uitlanders against the government. 
South Africa was at this time using one-half of the world's 
supply of dynamite. Obviously the control of a trade of 
such volume meant tremendous profits for the firm that 
enjoyed it. Such a monopoly had in 1888 been granted 
to one Lippert, who made it over to a French company. 
This was cancelled in 1893 and what was in form a gov- 
ernment monopoly was established. This gave most of 
the trade to the South African Explosives Company, which 
was affiliated with Nobel's Dynamite Trust, and made a 
profit of some forty shillings a case, paying about five 
shillmgs of this to the government. The exact nature of 
the agreements governing this company have never been 
made clear, and the mystery that was allowed to exist 
certainly justified the suspicions of corruption entertained 
by the mine owners, who found themselves forced to pay a 
high price for the explosives without which their gold 
mining could not go on. 

In 1887 the right to construct and operate all railways 
in the Transvaal was awarded to the Netherlands South 
African Railway Company; and the choice of the route 
for the new road was left to President Kruger. Two ports 
were available as the seaboard terminals: Delagoa Bay, 
in Portuguese territory, directly to the east, and Port 
Elizabeth in British territory further to the south. Kruger 
chose the first and thus further alienated English sym- 
pathy, since the volume of the trade of South Africa was 
in this way inevitably diverted to the Portuguese and in a 
large measure this important trade route was left at the 
mercy of the Boers. 



112 The Economic Causes of Modern War 

Besides winning the distrust of its neighbors, the Boer 
Government had also incurred the hostility of the capitalists 
who were at the head of the Rand mines. The control of 
these companies had gradually been centred in the hands 
of a comparatively small group, some of them Englishmen 
as in the cases of Rudd and Cecil Rhodes, but a large 
number, if not a majority, Jewish by race and German by 
birth. Wernher, Beit & Co., more commonly known as 
the "Eckstein Group," controlled twenty-three mines and 
three other concerns active in other financial fields, domi- 
nating capital with an actual market value of 76,000,000 
pounds. This group also exercised a large measure of con- 
trol in the Consolidated Goldfields (Beit, Rudd, and Cecil 
Rhodes) which controlled a group of nineteen mines and 
had a nominal capital of 18,120,000 pounds, and also in S. 
Neumann & Co., with a capital of 8,806,500 pounds. The 
same men were more or less concerned in other corpora- 
tions, including the Rothschild Exploration Company. 
The exact ramifications of these groups are of course not 
to be determined exactly, but the facts are known to have 
been about as stated, and at any rate serve to indicate the 
degree to which the gold fields had been brought into the 
hands of a comparatively small number of powerful finan- 
ciers. There were also the J. B. Robinson mines, nine- 
teen in number, with a total nominal capital of 14,317,500 
pounds. Last of all, it must be borne in mind that most of 
these men were among the owners and life governors of 
DeBeers, the diamond interests. 

International financiers practically owned the Transvaal, 
and although the exact nationalities of the various share- 
holders have never been determined with any precision, 
it is at least probable that French and German holdings 
exceeded the British. Liquor, dynamite, and gambling 



The Wars of the World: 1878-1914 113 

interests were in the hands of the same groups of capitalists 
that controlled the mines. 

Friction between the Boers who held the political rights 
and resented the presence of foreign capital, and the capi- 
talists whom they taxed, was natural and to be expected ; but 
it is not so entirely true as has been believed, that the 
taxation was unjust. The mines were taking out of the 
Transvaal 100,000,000 pounds a year, and were paying 
dividends of from 60 per cent, to 100 per cent, per annum. 
The direct tax upon this was 2.5 per cent, of the mine 
profits. 

It was easy enough for these powerful groups to secure 
control of the press and to do a great deal by means of it 
to stir up anti-Boer sentiment in spite of the legal restric- 
tions which the government exercised. Cecil Rhodes, to- 
gether with Messrs. Eckstein and Barnato, had acquired 
a leading interest in the Cape Argus, the evening paper at 
Cape Town, and with this as a nucleus gradually built up 
a chain of newspapers which included the Johannesburg 
Star, the Bulawayo Chronicle, the Rhodesia Herald, the 
African Review, and the Kimberley Diamond Fields Adver- 
tiser. Having a group of newspapers whose circulation 
reached almost every part of South Africa, this group could 
very easily reach public opinion in both Boer and British 
territory and stir up the people as was desired. Hostile to 
the Boer Government, the capitalists were able to secure 
the publication of inflammatory articles which had much 
to do with the eventual outbreak of the war. 

It is perhaps not possible to determine to what degree 
the British Government was actuated by a desire to extend 
the Empire further in South Africa, but it is at least sig- 
nificant that by the acquisition of the Transvaal and the 
Orange Free State at the close of the war, the British pos- 
sessions in South Africa were properly rounded out into a 



114 The Economic Causes of Modern War 

coherent bloc which included practically everything south 
of the Zambesi River. 

The situation which existed was such that war was 
bound to come sooner or later. In 1895 a group of Uit- 
landers planned a rebellion which was to give them control 
of the government, since the impossibility of political 
adjustments which would give the franchise to others than 
the Boers was seen to be quite impossible. Dr. Jameson, 
lieutenant to Cecil Rhodes, who was at that time premier of 
the Cape Colony, gathered a force of 500 police, with three 
field guns, on the border of the Transvaal, for the assist- 
ance of the rebels. The rising of the Uitlanders having 
been postponed, Jameson boldly led his troops across the 
frontier, on as mad a raid as has ever been attempted. 
Within two days he and his men were prisoners. Boer 
resentment was bitter; and, since the raiding force was 
made up of the colonial police, Rhodes was accused of 
conniving at an exploit of the preparations for which he 
could scarcely have been ignorant. 

The relations between the British colonies and the Boer 
states went from bad to worse. The diplomacy on both 
sides was futile and blundering, so that when in April, 
1898, the Uitlanders petitioned the British Government to 
secure political rights for them, a clash could hardly be 
avoided ; and when in October the Boers sent an ultimatum 
demanding the withdrawal of British troops from the 
border, hostilities had to follow. 

The British were miserably unprepared for war. The 
weakness of the forces then in South Africa furnish the 
best possible reason for believing that they neither wished 
nor expected it, for there were available only two cavalry 
regiments, three field batteries, and six and a half infantry 
battalions, about 6,000 men in all. Against them, accord- 
ing to the figures of the British Intelligence Service, the 



The Wars of the World: 1878-1914 115 

Boers could muster 32,000 men in the Transvaal, 22,000 in 
the Orange Free State, which cast its lot in with the sister 
republic, and about 100 guns. Mercenary troops and rebels 
from the British domains, in addition to these, brought the 
total to about 100,000 men. 

The war opened with Boer triumphs, and it was not 
until they had been borne down by sheer force of numbers 
that the Transvaal and the Orange Free State submitted. 
In all, Britain was compelled to send a total of 450,000 
men to South Africa. The two republics, losing their inde- 
pendence, became integral parts of the British Empire, 
but received in all respects the most generous terms and 
have in the end, as the events of 1914 showed, been suc- 
cessfully assimilated. 

Re-examination, bearing all these facts in mind, of the 
four theories of the origin of the war previously stated, 
serves to show the dominance of the economic motive in 
one form or another. Without underestimating in any way 
the infinite capacity of diplomats to blunder, it is impossible 
to attribute to this alone the outbreak of the war. Even 
diplomats cannot do quite so badly as that. 

Instigation from the Continent probably played a com- 
paratively minor role in egging the Boers on to war, 
although the famous telegram from the German Kaiser to 
President Kruger at the time of the Jameson raid serves 
to show that the chancellories of Europe were at least not 
blind to the situation in South Africa, and the opportuni- 
ties it offered for embarrassing Great Britain, their economic 
and colonial rival. Financiers did profit exceedingly by the 
war, and it is idle to assume that they were blind to this 
prospect, or inactive in bringing it about. Nor is it too 
much to believe that Great Britain was not wholly indiffer- 
ent to the possibility of rounding out her South African 
dominions. 



116 The Economic Causes of Modern War 

Whether one accepts one or all of these causes as the 
genesis of the war, the importance of economic pressure as 
a cause of war remains, for (setting aside the view which 
attributes the whole diflBculties brought about by diplo- 
matic blunders) all of the causes have an economic root. 
Certainly the friction between the Boer government and 
the capitalists grew out of trade rivalry, as did the difficul- 
ties over the diversion of trade from the British colonies to 
the rival Portuguese port, through the construction of the 
Netherlands Railways. 

The first war between the British and the Boers was an 
evident case of hostilities following imperial expansion. 
The basal economic character of such expansion has been 
shown. The second Boer War must also be set down as 
another example of a conflict due fundamentally to eco- 
nomic causes. 



THE CUBAN INSURRECTION AND SPANISH-AMERICAN WAR, 

1895-1898 

Nothing could have been further from the thoughts of 
the average patriotic American in 1898 than economic con- 
siderations or trade rivalry in connection with the war with 
Spain. It was regarded in America — with a good deal of 
justice — as a conflict undertaken from altruistic motives. 
Its object was to put an end to intolerable conditions exist- 
ing at our very doors, the exploitation of a helpless people 
by a brutal and wholly corrupt and inefficient administra- 
tion. 

The American troops who embarked for Cuba believed 
firmly that they were going to liberate the down-trodden 
from a cruel enemy. To suggest that behind the whole 
series of events lay economic troubles and that economic 
greed and rivalry were at the root of the war, would have 



The Wars of the World: 1878-1914 117 

appeared simple blasphemy; yet had the economic causes 
been inoperative, the Cuban insurrection would never have 
begun, and the consequent war between the United States 
and Spain would never have been necessary. 

There had, to be sure, been previous insurrections on the 
island, but none of proportions comparable to that which 
broke out in 1898, because none had such a weight of 
misery as a driving force behind them. It was the altera- 
tions in the status of the sugar market of the world, the 
benighted colonial policy of Spain, and the wholly selfish 
exploitation of Cuba by Spanish greed, together with tariff 
discrimination unfavorable both to the United States and 
to Cuba, which produced the poverty, wretchedness, and 
dissatisfaction that caused the insurrection. 

The island of Cuba is an agricultural land, almost wholly 
dependent upon its single staple crop, sugar-cane, which 
constitutes four-fifths of its produce. The other fifth is 
mainly tobacco. During the period immediately preceding 
the outbreak of the insurrection of 1895, partly as the 
result of a new method of seed-selection devised by Louis 
Vibnorin, the European production of beet sugar had been 
enormously increased, with the result that the demand for 
Cuban sugar-cane fell off with great rapidity. The amount 
of sugar made from European beets rose from 200,000 tons 
in 1850 to 3,841,000 tons m 1894,^ but the world's consump- 
tion had not increased proportionately. The Cuban market 

* Albert G. Robinson: Cuba and the Intervention, p. 31. Sugar had been 
discovered in beet roots in 1747, by Andreas Sigismund Marggraf, of the 
Berlin Academy of Sciences. His pupil, Franz Carl Achard, established 
the first beet-sugar factory in 1801 at Cunem, near Breslau, in Silesia. 
Napoleon's policy increased prices and gave an impetus to the industry, 
but his fall nearly wrecked it in Germany, the French manufacturers' 
more scientific methods enabling them to survive. In the Nineteenth 
Century, Vilmorin devised a method of testing beets for seed, by floating 
them in a brine strong enough to sustain all except those containing an 
unusual quantity of sugar. 



118 The Economic Causes of Modern War 

was almost destroyed. At the same time, tobacco growing 
in Egypt, Turkey, and other Asiatic countries had increased, 
and Europe was being supplied more and more from these 
regions because of their greater accessibility and the lower 
cost of transportation. 

This left the United States almost the sole market for 
Cuba; but at the same time the American production both 
of beet and cane sugar, and also of tobacco was developing, 
though not sufficiently to shut out the Cuban plantations 
entirely from their northern market. 

The natural result was a fall in the price of Cuban sugar, 
and a very heavy reduction in the profits of the planters, 
together with general unsettling of the economic condition 
of the island, which was productive of a great deal of 
misery. The situation demanded retrenchments, economies, 
and the application of scientific methods of production to 
an extent which the Cubans were not capable of accom- 
plishing. 

The planters looked to the Spanish Government for a 
readjustment of conditions which were seriously affecting 
the prosperity of the island; but they found small help 
in the venal, corrupt, and clumsy Spanish colonial admin- 
istration, Spain, in the Nineteenth Century, was still pur- 
suing the same policy that had cost her an empire in the 
Seventeenth. Learning nothing from the colonial experi- 
ments which had built up the British Empire in the very 
lands where her own possessions had gone to ruin, the 
Spanish Government continued to regard colonies as exist- 
ing solely for the enrichment of the mother country, and 
administered Cuba accordingly — blindly, stupidly, and with 
an incredible inefficiency. 

Although the only remaining outlet for the sugar cane 
grown in Cuba was the United States, Spain continued to 
maintain a system of tariff discrimination which diverted 



The Wars of the World: 1878-1914 119 

to the manufacturers of Catalonia the Yankee millions 
paid into the hands of the Cubans for sugar cane. Coal, 
iron, manufactured goods, the island imported from abroad. 
The United States, almost within sight of the Cuban coast, 
possessed all these, and as Cuba's principal customer, might 
well have expected the major portion of Cuban trade in 
return. 

To prevent this very exchange from taking place, Spain 
had so adjusted her tariff system that everything which the 
Cubans bought must come from Spanish merchants. In 
many cases the only way in which American goods could 
be sent into Cuba was by shipment to Spain and then by 
re-shipment back across the Atlantic. The Spanish mer- 
chants, assured by their paternalistic government of a 
monopoly of the Cuban market, took advantage of their 
favorable situation to charge exorbitant prices. The result 
in Cuba was the reduction of industry, with consequent 
poverty, misery, idleness, and general unrest. 

Bad as the economic situation was, other causes for dis- 
content among the islanders existed. The government was 
inefficient and corrupt. The Spanish governor of the little 
island received more in pay and allowances than the Presi- 
dent of the United States. The government posts were in 
the main held by Spaniards, especially the more lucrative; 
and Cubans who were able to find a way into the govern- 
ment usually despaired of improvement and followed the 
example in corruption set them by their Spanish masters. 
Managed as it was, from above, and managed not for the 
benefit of its people, but for the profit of Spain, the colony's 
taxation system speedily developed into another fruitful 
source of discontent. The taxes were heavy, and the Cubans 
regarded them as unjust. 

In 1868-1878 the vaguely felt discontent which had 
always smouldered in the island burst out in a rebellion 



120 The Economic Causes of Modern War 

that dragged along for ten years, but was confined alto- 
gether to the eastern provinces. There had been previous 
revolts, but the memory of this one remained vivid. Then 
came the economic crisis and the suffering which attended 
it. Spain did nothing to remedy, through political adjust- 
ment, the economic evils that dragged on year after year. 
Prior to 1894 the United States tariff still allowed a degree 
of reciprocity to Cuba, in spite of the discrimination against 
America in the tariffs of Spain; but on August 27, 1894, 
the passage of the Wilson Bill ^ put an end to this conces- 
sion and made the economic condition of the Cubans still 
more precarious. The situation had been bad enough when 
the Spanish tariffs made Cuba a dumping ground for 
Spain; it became intolerable when a second tariff system 
still further affected the sugar. Planters began to decrease 
their acreage, and the laborers thus thrown out of employ- 
ment, formed a group of malcontents who were fertile 
breeding ground for insurgent propaganda. 

The inefficiency and amazing folly of the Spanish admin- 
istration becomes apparent when it is considered that the 
revolution which in the end deprived Spain of one of the 
most fertile islands in the world, grew fundamentally out 

^ A contemporary account by the former American minister to Spain 
attributes the revolution entirely to this bill: "There can be no doubt 
that the economic crisis that followed that event (i.e., the passage of the 
bill) precipitated the present revolution. When exposed without miti- 
gation to two systems of hostile tariffs, at a time when the price of cane 
sugar had been reduced by competition to a very low point, the Cuban 
producers threw up their hands in despair, and the bands of laborers 
thus deprived of work were the fii-st to swell the ranks of the insur- 
gents. . . . When, therefore, we arrive at the final cause that drove the 
Cubans into the present revolution, we discover that the rising really grew 
out of a struggle for bread — a struggle for bread in one of the most 
favored spots in the world, produced in the main by economic laws wedded 
to the obsolete doctrine that the commerce of a colony is a possession 
which the parent state has a right to manipulate in its own interest re- 
gardless of the fate of the colony itself." — Hannis Taylor: "Review of 
the Cuban Question," North American Review, 165:616-617, N., '97. 



The Wars of the World: 1878-1914 121 

of a struggle for food in a land which might have been one 
of the most productive in the world. Selfishness, greed, 
stupidity, expressed in a blind neglect of the economic situa- 
tion in the fertile island — these caused the Cuban insurrec- 
tion and the American intervention which had to follow/ 

When the army of Gomez began hostilities in 1895 it did 
not have the support of the entire Cuban population. Only 
gradually did it come to win the backing of all classes, or 
of most, at any rate; and it was not until two years later 
that complete independence from Spain was made the 
avowed object of the insurrection, which thus became a 
revolution. Autonomy was proclaimed by the rebels in 
November, 1897. 

The Cuban native army, although greatly inferior in 
numbers and equipment to the Spanish regulars operating 
against it, had very much the better of it, owing to the fact 
that it was operating in friendly territory, could obtain 
supplies more easily, and was much more mobile owing to 
its superior ability to move through the jungles. In order 
to deprive the rebels of these advantages as far as possible, 
Weyler, the Spanish Captain-General, adopted a policy of 
concentration, stripping the country of every inhabitant, 

^ The viewa expressed on this point and the analysis of the causes of 
the war by Albert G. Robinson are interesting. He says: "It is an im- 
portant fact, though generally overlooked, that repressive economic laws 
have been in every case the provoking cause of Cuban revolt. Unlike 
those of her neighbors in Latin America; Cuba's insurrections have never 
been the outcome of purely political conditions. Nor have they ever 
been the result of individual ambition. Spain's colonial policy was, in 
every instance, the cause of Cuban revolt. In that policy, she violated 
a fundamental principle of government. She assumed that the subject 
existed solely for the benefit of the sovereign. In establishing her col- 
ony she sought only her own financial advantage. Other colonizing coun- 
tries learned, through experience, the folly of such a policy. Spain never 
learned it, and has now lost her insular possessions." — Albert G. Robinson: 
Cuba and the Intervention, p. 2. 



122 The Economic Causes of Modem War 

and moving men, women, and children forcibly into con- 
centration camps where they suffered extreme privations. 

It must be remembered that the Insurrectos, too, had 
adopted a policy very much the same, and that they had 
put into effect in 1895 a policy of economic warfare which 
involved a deliberate devastation of their own country 
in order to hamper the Spaniards. 

There can be no question that the American intervention 
was prompted in the main by humanitarian motives. The 
brutality of Spanish administration had inflamed public 
opinion in the United States, which was carefully played 
upon by Cuban juntos and by the sensational press. The 
island of Cuba swarmed with American special corre- 
spondents, all engaged in sending back to their newspapers 
the most emotional stories possible. 

It was this primarily that brought about American inter- 
vention in 1898; and this was the only cause for war of 
which the public was aware. But this was not actually the 
sole American motive. For at least a hundred years it 
had been realized by various American statesmen that 
Cuba belonged economically to the United States, and 
proposals for acquiring possession of it had been made 
from time to time. 

In President McKinley's famous message to Congress 
dealing with the subject of intervention, in April, 1898, the 
economic motive appears explicitly in the third of his 
reasons for interference : 

"Third, the right to intervene may be justified by the very 
serious injury to the commerce, trade, and business of our peo- 
ple, and by the wanton destruction of property and devastation 
of the island." 

The "serious injury" amounted to the practical wiping 
out of American trade in Cuba, which at the beginning 



The Wars oj the World: 1878-1914 123 

of the rebellion had been nearly $100,000,000 annually.^ 
Even in the absence of a direct economic motive affecting 
the interests of the United States themselves, the interven- 
tion in Cuba may properly be regarded as due to economic 
causes, simply because it was a result of the insurrection; 
and since this revolt grew directly from economic causes, 
the intervention may certaialy be said to have grown indi- 
rectly from them.- The entire conflict was due to Spanish 
exploitation of a fertile colony. If economic justice had 
prevailed in Cuba there would have been no insurrection, 
certainly not a revolt sufficiently widespread to give rise 
to the reign of brutality in its suppression which brought 
the United States into the war. 

The Cuban Revolution and the Spanish-American War 
were both the outcome of economic rivalry, with three main 
phases: first, between the European and Cuban sugar 
industries; second, between the economic interests of the 
colony and those of the mother country ; and third, between 
American and Spanish manufacturers, with advantage on 
the side of the latter, through tariff discrimination. 

THE GRECO-TURKISH WAR, 1897 

The war between Greece and Turkey in 1897, which 
ended in Greek defeat after only thirty days of campaign- 
ing, was too trifling an affair to deserve much attention. 
Yet it is of interest because it shows how, even in wars 
waged for racial or political reasons, economic conditions 
still contrive in some measure to find entrance. 

'•Hannis Taylor: "A Review of the Cuban Question in its Economic, 
Political, and Diplomatic Aspects," North American Review, 165:611, 
N, '97. 

^"The Cuban Insurrection against Spain, and thus indirectly the Span- 
ish-American War, was the outcome of the sugar situation." E. R. A. 
Seligman: The Economic Interpretation oj History, p. 86. 



124 The Economic Causes of Modern War 

In the conflicting interests and the jealousies of the great 
Powers involved in this war, moreover, the old element of 
European international discord, which we have seen springs 
in large measure from economic causes, again comes into 
play. England loses ground with the Ottoman Empire, 
whose favor is all-important to keep Russia out of Con- 
stantinople and away from the route to the rich lands of 
India. Germany seeks to curry favor with the Porte in 
order to facilitate the Drang nach Osten and the relief of 
German over-population, the excess of manufactures, and 
the need for markets and raw materials. Russia, ever with 
an eye to Constantinople and the necessity of securing her 
southern trade routes, vies with Germany in seeking to 
establish herself in the good graces of the Sultan. All of 
this diplomacy has an origin in the economic difficulties of 
the great Powers. 

Yet the motives which led the venal Greek statesmen 
into war upon the Turk were not primarily economic. The 
difficulties arose over the ever-perplexing Cretan question, 
and were not wholly concerned even with territorial 
aggrandizement by possession of the island. The motives 
were very largely religious and racial, for the Cretans were 
brothers in blood of the Greeks and in the main the popu- 
lation of the island professed the Christian faith ; but they 
were under the rule of the Sultan, who evaded whenever 
possible his agreement to assign a Christian Vali to govern 
them. 

Turkish rule in Crete was no better than Turkish rule has 
ever been anywhere. The Cretans were oppressed; they 
thought themselves over- taxed ; and the government of the 
island was corrupt. There had been numerous revolts, of 
which the most recent and the most vigorous had been 
suppressed successfully by the Ottoman government. Dur- 



The Wars of the World: 1878-1914 125 

ing the year between this revolt and the beginnmgs of the 
difficulties between Greece and Turkey, there had been 
several massacres of Christians, which roused a powerful 
pro-Cretan sentiment in Greece, although it must be ad- 
mitted that when the opportunity came, the Christians in 
Crete showed themselves quite as ready to massacre Mos- 
lems as ever Moslems had been to massacre them. 

In 1896 a Greek patriotic society, the Ethnike Hetaira, 
which had for one of its objects the relief of Crete, began 
to increase in power. It was not in essence different from 
the Serbian patriotic society which Austria alleged in 1914 
had been instrumental in the murder of the Archduke 
Ferdinand. The existence of such societies is inevitable 
wherever a coherent racial unit is forcibly amalgamated 
with an alien civilization and government, although in this 
case it springs up in independent Greece rather than in 
the oppressed land of Crete itself. As in Serbia, so in 
Greece, the army was largely represented in the member- 
ship — to such an extent that three-quarters of the com- 
missioned personnel is said to have belonged. This society 
had a great deal to do with rousing the sentiment of the 
Greek nation, and when in 1897 there were more massacres, 
war was the most natural consequence. 

The armies of the two powers massed on the Thessalian 
frontier and the incidents that are the usual accompani- 
ments of simultaneous mobilizations took place. Firing 
across the frontier did not serve to allay popular excite- 
ment. 

February 11, 1897, the Greek navy, under the command 
of the Crown Prince, was sent to oppose the landing of 
Turkish relief on the island, with orders to use force if 
necessary. Two days later, Greek troops under the com- 
mand of Colonel Vassos, moving to occupy the island, began 



126 The Economic Causes of Modern War 

hostilities. The Greeks, after a few preliminary successes, 
were hopelessly defeated. Turkey won back again portions 
of Thessaly which had been ceded to Greece in 1881, and 
the defeated nation was compelled to give up for a time its 
hope of annexing Crete. 

Although the ostensible and actual primary causes of 
the war were racial and religious, as well as humanitarian, 
it cannot be said that they were the only ones. Crete be- 
longed to Greece, not only racially, but also geographically 
and economically. It is a very rich island, and the Turkish 
maladministration had not been so bad but that the land 
retained its wealth. It would have made a highly desirable 
economic addition to Greek territory, for Greece is not 
blessed with much fertile land. 

The Hon. E. A, Bartlett summed up the economic situa- 
tion in a paragraph : "Crete is a rich island which has been 
very lightly taxed under the much abused Turk. The 
Greeks desired to annex Crete, which they regard as a 
milch cow to be milked and bled for the benefit of Greece." ^ 

THE HERERO RISING, 1903-1908 

After the original annexation in 1885, German occupation 
of Southwest Africa had been disturbed only by an insignifi- 
cant Hottentot revolt, suppressed in 1894, and a few local 
risings. This quiet possession of a colony whose commer- 
cial value was slowly developing, was broken in October, 
1903, by an insurrection among the Bondelzwart natives, 
in the extreme south of the German dominions. Colonel 
Theodor Leutwein, the German governor, in his effort to 
crush the rebellion as speedily as possible, practically 
stripped Damaraland, in the north, of troops, giving oppor- 

'E. A. Bartlett: The Battlefields of Thessaly, p. 17. 



The Wars of the World: 1878-1914 127 

tunity to the Herero natives for a revolt which had long 
been planned and prepared. 

Its motive was chiefly impatience with German rule, the 
inevitable clash between the colonizing white man, driven 
out of Europe by economic necessity, and the native whom 
he seeks to displace. This elementary cause for rebellion 
had been aggravated by abuses by the white traders, bru- 
tality of some of the officials, and encroachments on tribal 
lands. 

By New Year's Day, 1904, Colonel Leutwein had sup- 
pressed the rising among the Bondelzwarts, but on the 
12th day of January, the Hereros attacked the settlers in 
theh^ country, murdering the families and devastating the 
farms. To deal with them, reinforcements had to be sent 
from Germany. The German army, lacking the long expe- 
rience of colonial warfare possessed by the British, and for 
centuries trained in the tradition of European warfare only, 
did not adapt itself well to the guerilla tactics of the 
Hereros. In spite of a defeat in one pitched battle, the 
natives were able to terrorize the countryside until in 
October, 1904, a rising of Hottentots occurred to encourage 
them further. The German policy of Schrecklichkeit now 
adopted, provoked a third revolt, this time among Hotten- 
tot tribes hitherto quiet. The war dragged on until 1907, 
when German success led to a reduction of forces in the 
colonies; and hostilities were finally concluded in 1908. 

Since it was a result of German colonial policy made 
necessary by the economic requirements of the new Empire, 
the Herero rising, like other conflicts between colonizing 
powers and natives reluctant to be dispossessed, is to be 
classed among the wars whose cause is fundamentally 
economic. In no essential respect does it differ from other 
wars of colonization. 



128 The Economic Causes of Modern War 

ITALO-TURKISH WAR, 1911 

Italy's war with Turkey to secure Tripoli was wholly the 
outcome of economic causes, principally the desire of the 
Italians to have a share in the undeveloped lands of the 
globe, in which their commercial rivals were rapidly out- 
stripping them. 

Nowhere can there be found a more perfect example of 
the way in which over-population produces emigration and 
compels a state either to seek an enlargement of its domains, 
or else to watch its citizens drift away and be absorbed 
into the civilization of other lands. In addition to the need 
for a colony where the surplus of Italian population might 
settle, a second economic motive for war existed in the 
Tripolitan mineral deposits and the possibility of extensive 
agricultural development under scientific management 
which the Italians felt themselves capable of introducing. 
At the bottom of the whole affair, besides the other eco- 
nomic interests, lay the pressure of the population of Italy. 

Italy's imperial ambitions were so late in developing 
that when her statesmen sought room in the globe where 
their country and its trade might expand, they found most 
of the available territory already occupied by states too 
powerful to be dispossessed. The failure in Abyssinia is 
an obvious example, as is Italian inability to secure a share 
when the Powers were engaged in the scramble for Chinese 
territory. As the Italian nation came to unity in the years 
following the Risorgimento of 1860-1861, imperial ambi- 
tions arose, not merely because there was a feeling that the 
dignity of the united nation demanded possessions over- 
seas, comparable to those of other Powers of Europe, 
but because an economic need for expansion in competition 
with the other Powers began to make itself felt. 

No other nation, not even Germany, has faced an emi- 



The Wars oj the World: 1878-1914 129 

gration problem so serious as that in Italy, nor has any 
people shown itself more adaptable in settling in foreign 
lands. By means of an uncanny ''wireless" the working 
classes in Italy, from which the emigrants mainly come, 
seem to know to a nicety the exact conditions of the labor 
market of the world, and precisely the right time to emi- 
grate. 

The tide of emigration has turned chiefly to the United 
States, but great numbers have gone to the Argentine 
Republic and to the French colony in Tunis — by the logic 
of geography an Italian dominion, into which, to the fury 
of Italian imperialists, France, with Bismarck's secret con- 
nivance, forced her way. 

The loss of Italian citizens going to other countries 
rose between 1878 and 1900 from 96,000 to 352,782 and in 
1906 reached its maximum of 787,977. In the following 
year it declined only a little, to 704,675; and in 1909 it 
declined still further to 625,637. Since then the emigration 
each year has hovered between 500,000 and 600,000.^ These 
rates of emigration present a rough parallel to the rising 
excess of births over deaths during the years between 1880- 
1910.' 

For the purposes of Italy, Tripoli was the only space 
left on the coasts of the Mediterranean, and to its acquisi- 
tion Italian statesmanship accordingly turned itself. 

Only a few weeks before the outbreak of hostilities, an 
editorial comment in the Rassegna Nazionale (Florence) 
summed up the Italian attitude toward the war in two 
succinct paragraphs: 

"If tomorrow France should rule over the entire northern 
coast of Africa, not only would this cause added dangers for us 

'Algar Thorold: "The Expansion of Italy," Edinburgh Review, 220:67: 
Jy., 14. 

^ See table on p. 17. 



130 The Economic Causes of Modern War 

in case of hostilities — which it is to be hoped may never take 
place — when France could attack us from the French and Afri- 
can coasts and from Corsica, but also in time of peace we should 
be seriously annoyed by our relegation to secondary rank as a 
Mediterranean power, and loss of prestige. As well, we should 
be bound in an iron girdle that would render any industrial and 
economic expansion of almost treble difficulty. 

"Every publicist recognizes the necessity of re-establishing the 
balance of power by means of an action on our part in Tripoli- 
tania, but some maintain that this action should be limited to 
an economic penetration without embroiling our relations with 
Turkey and without embarking on any colonial adventure. But 
is this possible?" 

Of course it was not possible. The Ottoman Empire had 
Tripoli and intended to hold it. But the Ottoman Empire 
was weak and disorganized, still confused as a result of the 
revolt of the Young Turks three years before. Italy had 
the force to take what she wanted from a weaker nation 
and did so, — following the very practical principles of inter- 
national ethics. 

There is one defense to be made of Italy's appeal to force 
— aside from the obvious and sufficient justification that she 
needed Tripoli. That is, that efforts at a peaceful and merely 
economic penetration of the country had been thwarted at 
every step by the Turkish Government, whether from anti- 
foreign prejudice, or, as is more likely, from a well-grounded 
fear that the entrance of Italy in an economic role might be 
the prelude to political intervention supported by force if 
necessary, for the Turk has dealt with Europe through 
many centuries and is wise in the ways of the practical dip- 
lomat. 

Italian immigrants, who had been going to Tripoli as 
well as to Tunis, had undeniably been ill-treated by the 
Turkish officials. Legal or illegal, the Turk used any means 
to discourage the coming of Italians. Turkish subjects who 



The Wars of the World: 1878-1914 131 

ventured to sell lands to the infidel suffered from threats 
or actual unprisonment. Turkish troops used force to pre- 
vent native laborers from giving their services to the Ital- 
ian settlers. 

In spite of this, Italy had already made considerable 
peaceful progress in Tripoli when war finally broke out. 
Bi-monthly mail service by steamer from Sicily had been 
established to all the principal ports of Tripoli. In Bergasi 
there was an Italian post ofiSce with a savings bank and free 
Italian schools. Institutions of about the same sort had 
been set up in other parts of Tripoli and the Banca di 
Roma maintained Tripolitan branches and had done a 
great deal towards the economic development of the country. 

In 1911 the hour for striking the blow to secure the 
colonies was as favorable as could be expected. The Sub- 
lime Porte was in even more difficulties than usual. Affairs 
had not yet got well settled after the revolt of the Young 
Turks. Spain and France were arranging what amounted 
practically to the partition of the Turkish possessions in 
Morocco. Bulgaria, also quick to take advantage of this 
state of affairs, had but recently declared her complete 
independence. 

Europe, beginning to breathe again after the crisis at 
Agadir, which had threatened a war that might well have 
become general, was suddenly confronted, before its chan- 
cellories had received any intimation of what was afoot, 
with the Italian war. Events moved with amazing swift- 
ness. An Italian ultimatum was presented to the Porte on 
September 28, 1911; Turkish efforts to temporize were 
rejected; and on the following day war was declared. A 
fleet under the Due d'Abruzzi blockaded the port of Pre- 
visa in the Adriatic, and 40,000 troops were thrown into 
Tripoli with a speed and certainty that showed the smooth- 
ness of the working of the Italian staff, the result of 



132 The Economic Causes of Modern War 

maneuvres held with this very purpose only the year before. 
Austria demanded that her ally should be content with car- 
rying the war into Africa only, and that Turkish territory 
should otherwise be respected. Great Britain refused to 
allow Turkish troops to pass through Egypt (still nominally 
under Turkish suzerainty) on their way to Tripoli — all this 
within a week. 

Turkey was hopelessly defeated and was forced to yield 
to the Italian demands. Her misfortunes in Africa pre- 
pared the way for those of the following year in the 
Balkans. 

Though pressure of population was the primary reason 
for the Tripolitan war, the possibility of future food sup- 
plies from agricultural development in Tripoli under 
Italian direction, and of new markets for the growing 
industrial life of Italy must have been potent considerations 
in the minds of the Italian statesmen who willed the war. 
Although carried out on a smaller scale and with less con- 
sistent success than that of the other Powers, Italian 
colonial policy has sprung from the same economic necessity 
as theirs. 

THE BALKAN WARS, 1912-1913 

In the Balkans, war fills about the same place in the 
scheme of things that baseball does in America. This is a 
consideration that must be borne in mind constantly, when 
one attempts to estimate the motives which have made this 
group of little states a veritable hornet's nest for Europe 
and which in the end set the whole world by the ears. Among 
all the rivalries, economic, racial, religious, nationalistic, 
which have produced the turmoil of the Balkans, the pure 
love of fighting among its warlike inhabitants has not been 
the least. 

In the welter of races, nationalities, religions, and ideals 



The Wars of the World: 1878-1914 133 

which make up the Balkan states of Montenegro, Serbia, 
Bulgaria, Rumania, Greece, and the Turkish vilayets 
which in combination are referred to as Albania and Mace- 
donia, there is ample cause for constant wars and threats 
of war. Only during the Nineteenth Century did the Balkan 
states win their independence of Turkish rule, and only 
gradually have they built up agriculture and the begin- 
nings of industry suflacient to make their commerce great 
enough to create any economic problem at all. 

The Balkan wars have been produced by the love of 
fighting. They have been produced by the hatred of the 
Moslem for the Christian and of the Christian for the 
Moslem. They have been produced by the brutality and 
corruption of the Turk in his administration of his 
provinces. They have been produced in retaliation for mas- 
sacres — both Christian and Moslem. They have been pro- 
duced in the effort to bring races together under the same 
government. They have been the reaction against oppres- 
sive taxation. But among all these, the economic causes 
which have produced war cannot be lost to sight. Balkan 
problems would have settled themselves long since, were it 
not for the interference of European Powers; and the 
motive for this intervention is economic. That the eco- 
nomic rivalries of the great Powers have had most to do 
with the prevention of Balkan pacification and of the ade- 
quate provision for the economic needs of Serbia, Monte- 
negro, and Bulgaria, has been evident for years. 

Until the year 1912, Turkey, although unable to main- 
tain its suzerainty over its erstwhile vassals, had pursued 
with surprising success the policy of divide et impera, play- 
ing off one Balkan state against another, watching with 
satisfaction their difficulties among themselves, and taking 
advantage equally of the jealousies and rival ambitions of 
the Powers of Europe. 



134 The Economic Causes of Modern War 

In 1912 a great light burst upon the statesmen of the 
little principalities. They realized for the first time to 
what an extent their bickerings among themselves were 
playing into the hands of the common foe, and they com- 
promised, March 15, 1912, a treaty between Serbia and 
Bulgaria put an end to the ill-feeling that had existed since 
the war of 1885, and provided for joint action against the 
Turk. In September of the same year a similar treaty was 
made between Greece and Bulgaria. Montenegro, though 
not formally bound by treaty, came to an understanding, 
tacit and implied, though not formally expressed. 

Hitherto the rivalry of the states had concerned itself 
chiefly with Macedonian vilayets still under Turkish rule, 
but populated by representatives of all the Slavic races in 
the Balkans, in sufficient number to give each state reason 
for claiming the same territory. By the terms of the 
treaties this rivalry was ended, and the lands to which each 
had a claim were specifically delimited. 

The ambitions of the great Powers in the Balkans may 
be stated — too sketchily for complete accuracy — about as 
follows: Russia followed an intermittent policy of expan- 
sion toward Constantinople, and continued to follow a 
Pan-Slav policy through which she hoped to maintain her 
hegemony among the Slavic nations. She saw, moreover, in 
Kavalla, a way of escaping the menace to her commerce 
and her naval power implied in the Ottoman hold upon 
the Dardanelles. So far as sharing in the trade of the 
Balkans was concerned, the Russian economic interests 
were slight. 

Austria-Hungary sought to expand southward to the 
^gean and along the Adriatic at the expense of Serbia, 
eyeing with especial longing the port of Salonika, on whose 
possession the Serbs were equally bent. Serbian domina- 
tion on the eastern shore of the Adriatic would jeopardize 



The Wars of the World: 1878-1914 135 

Austria's sole route to the sea from Trieste and Fiume. To 
the Dual Monarchy the port of Salonika would mean a 
ready means of release for Hungarian and Austrian com- 
merce, hampered by insufficient access to the sea. To 
Serbia the same port meant also the long-desired access to 
the sea and release from the complete dependence upon 
Austrian markets which the Austrians sought to impose on 
their smaller, land-locked neighbor. 

German economic policy in the Balkans in most respects 
paralleled that of Austria. The formulation of the Mittel- 
Europa scheme and of the Drang nach Osten gave the Bal- 
kans a peculiar importance to both powers, since domina- 
tion there was essential to the penetration of the Near 
East. If the Berlin-to-Bagdad Railway were ever com- 
pletely built, a long section would have to run through this 
territory, which would be most valuable under either the 
German or the Austrian flag — a prospect rudely interrupted 
by the formation of the strong Balkan Confederacy. 

Great Britain, for economic reasons and from strategic 
considerations which had their basis in economic considera- 
tions, had long sought to check Russian expansion, especially 
the acquisition of Constantinople, which controlled the 
route to India. The importance of Constantinople de- 
termined the policy of the British Empire toward Turkey, 
and hence toward the Balkans. 

The economic motives for warfare among the Balkan 
states themselves consisted mainly in desire for the adjust- 
ment of obvious inequalities. Montenegro, a tiny princi- 
pality, rocky and mountainous, with only a few fertile 
vaUeys, and with but a small opening upon the Adriatic 
coast, turned longing eyes toward the fertile plains of Mace- 
donia. In the end she hurried into hostilities with Turkey, 
risking annihilation if the support of the other Balkan 
states should fail, because of the realization on the part of 



136 The Economic Causes of Modern War 

the King's advisers, General Martinovich and M. Pla- 
menatz, that if Europe took in hand the reform of Mace- 
donia, where conditions had for years been a crying scandal 
in international affairs, there would be no hope of Monte- 
negrin accessions. 

Bulgaria needed a larger seacoast. She had, to be sure, 
secured a footing on the coast of the Black Sea, but she, too, 
aspired to reaching the -^Egean, where the Turkish domi- 
nance at least would be less repressive, and in this ambition 
the Bulgarian and Austrian economic interests came into 
a sharp rivalry. Bulgaria also had a lively appreciation of 
the value of the fertile plains of Macedonia. 

The condition of Serbia was the most precarious of all 
the future allies. Unlike the others, she was absolutely 
cut off from the sea, and her statesmen dreamed of re- 
storing the ancient boundaries of the glorious days of the 
Serbian Empire. She was an important market for Austria- 
Hungary and the economic relationship existing was so close 
that most of the Serbian purchases were in Austrian mar- 
kets. Situated as she was, the whims of the more powerful 
state could at any time cause inconvenience and irritation, 
or a situation even more serious. The closing of the 
Austrian frontiers to Serbian exports of pigs ^ had incensed 
the entire nation. So difficult was the economic position of 
the Serbs because of their restricted boundaries, that M. 
Milanovich at one time feared to risk a rupture with Tur- 
key lest it should mean a complete economic isolation. 

Greece still coveted nominal as well as actual possession 
of Crete, for the sake of its fertility as well as for racial 
reasons. There had been, besides, difficulties in the Balkans 
with regard to railway questions, in which the Turkish 
power had made difficulties, notably in the case of the Bul- 

' See p. 173. 



The Wars of the World: 1878-1914 137 

garian effort to connect railways with Salonika and the 
Greek effort to secure better connections with Europe. 

With such a tangle of rival economic interests, made more 
complex by the gravity of racial and religious problems, 
it is small wonder that war followed immediately upon the 
completion of the agreements among the Balkan states 
which made them powerful enough to dare attack their 
erstwhile suzerain. The necessary spark was furnished 
by the pecuUarly brutal atrocities at Kochana, the culmi- 
nation of a long series of massacres. 

Montenegro plunged boldly into the war alone, October 
8, 1912, hoping for the support of the other states, and 
knowing her cause lost if she did not secure it. Within 
ten days war existed between Turkey and all the Balkan 
states except Rumania. 

The success of the Allies was beyond all their expecta- 
tions. Serbian troops drove southward and secured the 
coveted outlet to the Adriatic at Durazzo, November 28th, 
thereby checkmating Austrian ambitions for southward 
expansion. Montenegro forced its way to Scutari. Greece 
engaged the Turkish navy and seized Salonika, November 
8th. The Bulgarians, in two pitched battles, Kirk Kilisse, 
October 22-24, and Lule Burgas, October 29-31, drove 
the Turks behind the Tchataldja lines, the last defenses of 
Constantinople. 

Turkish requests for mediation led to a peace conference 
in London, December 16, 1912, where the Powers of Europe 
were represented as well as the belligerents. The economic 
rivalry which existed between Serbia and Austria appeared 
in the diflSculties over Durazzo, which the Serbs insisted 
upon retaining, with a corridor to the sea, and which the 
Austrians knew would affect their interests in Albania, and 
along the Adriatic. Austria threatened to mobilize. The 
Entente Powers supported the Balkan states, but Serbia had 



138 The Economic Causes of Modern War 

at length to give up her port, with assurances of access to 
the sea. January 6th, Turkey, finding the negotiations 
going against her, offered protest. The Balkan al|ies sus- 
pended discussion and resumed hostilities. 

Bulgarians and Serbs forced their way to Adrianople; 
and Montenegro, defying Europe, took Scutari. Greece had 
kept up a show of hostilities even while the conference was 
in progress. May 30, 1913, peace was finally made after 
a second conference in London, which began May 3. 
War immediately broke out among the lately allied states 
over the distribution of the spoils, Serbia having been 
deprived of what she had expected, through the jealousy 
of Austria, which had led to the erection of the independent 
state of Albania, blocking Serbia from the sea. This was 
the outcome of economic difficulties of long standing. The 
chief advantage to Austria was the retention of her monop- 
oly of Serbian trade so long as the Serbs were cut off from 
other nations by their lack of a port. Bulgaria was willing 
to attack Serbia rather than give up any of the gains of the 
war, which were greatly to her commercial advantage. 

The economic causes of the Balkan Wars fall into two 
categories, the desire for expansion of the great Powers 
and those of the Balkan states themselves. It is true that 
the Powers whose interference frustrated the efforts of the 
smaller states did not contemplate immediate territorial 
aggrandizement at the expense of the states that they 
bullied. Both Germany and Austria, however, looked for 
this eventually, in connection with their efforts to build 
up empires which would supply them with the food, mar- 
kets, and raw materials that they required. Their Balkan 
policies were necessary to the furtherance of this design. 
Russia was involved mainly through her desire to gain 
access to the Mediterranean; and England through her 
perpetual concern over Constantinople, even after the 



The Wars of the World: 1878-1914 139 

Anglo-Russian understanding of 1907. French interests 
were involved because of the large sums loaned in the 
Balkans/ Evidently, with the possible exception of France, 
all were directly brought into the negotiations and to the 
verge of conflict, because of the familiar need of territorial 
expansion and the defense of colonial territory already 
acquired. The French motives were financial. 

Although the pressure of population among the Balkan 
states was not serious, their economic motives did not other- 
wise greatly differ from those of the other powers. They, 
too, sought to satisfy what they regarded as their economic 
requirements. 

The vast importance of economic pressure as an element 
in the causation of the wars of the world since 1878 is 
now evident, not merely from a priori exammation of the 
situation of the states of Europe, as regards population, 
manufactures, and the supply of food and raw materials, 
but also from the study of the origin of the twenty 
most important conflicts of the period. In none of these 
is an important economic motive lacking. 

Whether the cause of hostilities be the eternal clash be- 
tween colonist and native, as m the Zulu War, the Abys- 
sinian Wars, the fighting in Annam, the Boxer Rebellion, 
and the Herero Rising; whether it be an imperial impulse 
to acquire further territory or to safeguard investors, as 
in the Boer Wars and the Occupation of Egypt, the Nitrate 
War, the Greco-Turkish and Italo-Turkish Wars, the Bal- 
kan Wars, and the series of wars in the Far East; or whether 
it be an effort to win a strategic frontier for commercially 
profitable territory already acquired, — as was Great Britain's 
attempt on Afghan lands for the protection of India — the 
quarrel is economic at its root. 

' These loans amounted to 1,000,000,000 francs in 1912. See p. 193. 



140 The Econojnic Causes of Modern War 

If every state possessed a stationary population such as 
that of France, and immigration problems were thus ended ; 
if every state were economically self-sufl&cing as regards 
food and raw materials, and had unhindered access to the 
markets of the world — there would be no need for colonies 
and spheres of mfluence. With them would vanish the 
squabbles over naval bases, the ruthless crushing of weak 
native states, the safeguarding of lines of transport, and the 
ever-present spectre of national starvation and unemploy- 
ment should they be cut. In one fashion or another, as 
this survey of recent history has shown, such difficulties 
have been at the root of all hostilities. 

In all of the great wars, an economic problem can be seen 
as the fundamental cause which makes conflict necessary, 
and though not always apparent to the peoples who are 
being led into war nor to the soldiers who fight, it is usually 
clear enough to the statesmen whose negotiations break 
off as war begins. It is equally apparent to any one who 
closely scrutinizes, not merely the record of political events 
and diplomatic interchanges, but the statistics which show 
the movements of emigration and immigration, the sources 
of food supplies and raw materials, and the commercial 
reports which indicate the never-ceasing struggle for mar- 
kets. 



CHAPTER IV 

THE ECONOMIC MOTIVES OF THE WORLD WAR: 1914-1918 

Underneath all the clamor about making the world 
safe for democracy, the sins of militarism, the guilt of the 
German, the neutrality of Belgium, and the saving of 
civilization from the beast, has lain the economic motive, 
in the World War as in all others. 

Never has economic rivalry during the years preceding 
hostilities been more evident as a war-cause, although the 
ethical and idealistic questions at stake have served to 
obscure it; and the governments involved (even when most 
solicitous for the safeguarding of their economic interests) 
have quite naturally preferred to direct popular attention 
to other portions of their policy. 

Not until the Peace Conference did the peoples of the 
various warring countries, and particularly of the United 
States, begin to realize how vast were the economic ques- 
tions and interests underlying the war. 

Great Britain, no doubt, did go to war to safeguard Bel- 
gium — the more so because only thus could the safety of 
her own territory be assured. (She has been by no means 
so much concerned over the safety of small peoples in other 
portions of the globe.) France, no doubt, fought to ward 
off the German hordes bent upon carrying Kultur to Paris, 
even though the French themselves had not hesitated to 
carry their own civilization to other benighted portions of 
the globe by force of arms. Austria-Hungary, undoubtedly, 
was righteously indignant over the murder of the Crown 
Prince Ferdinand. Even Germany was not wholly insin- 

141 



142 The Economic Causes of Modern War 

cere in insisting that she fought of necessity, ringed about 
by armed foes, jealous of her progress and seeking her de- 
struction in order to eliminate from the field their most 
formidable competitor; for Germany was the most formi- 
dable competitor of most of the industrial countries of the 
world. 

The origins of the war are to be found in the economic 
rivalries of the great Powers, not to the exclusion of the 
idealistic war aims which have been put forth, but none 
the less reaUy and actually. The murder of the Crown 
Prince at Sarajevo or the invasion of Belgium did not cause 
the war or the participation of any particular nation. These 
events precipitated war in the same sense in which a sharp 
tap upon a test tube wiU precipitate a salt from a chemical 
solution just upon the point of saturation. The funda- 
mental causes lie behind that. 

Colonial rivalries in Asia, Africa, and the islands scat- 
tered here and there about the globe; friction over spheres 
of economic influence; difficulties over coaling stations and 
the safeguarding of trade routes; displacing by one nation 
of another in a favorite and long-accustomed field — aU these 
have contributed to the era of fear, hate, and distrust that 
broke into war at last. Out of commercial rivalries and 
rival merchant fleets have grown up hostile navies. Out 
of ill-adjusted economic frontiers and the resultant suffer- 
ing have grown great military establishments. In the end 
war had to come. 

The surprising thing is not that the World War came at 
last, but that it did not come long before. The Casablanca 
affair in 1908 ; the Austrian violation of the Treaty of Ber- 
lin in the seizure of Bosnia and Herzegovina in 1908; the 
Agadir incident in 1911; the wars in the Balkans in 1912- 
1913, might any one of them have set the world ablaze, 
and every one of them did actually come near doing so. 



The World War: 1914-1918 143 

These incidents were of minor importance in themselves — 
a German consul's broken cane, the annexation of two small 
provinces, the presence of a gunboat in an African harbor, 
the quarrels of a few small nations. But each one of them 
raised the spectre of a world war because the economic 
rivalry existing among all of the great Powers of Europe 
had led to friction so bitter and mutual distrust so general, 
to political rivalries, military rivalries, naval rivalries, so 
fierce, that the death of a single man could bring the whole 
world into death grips. 

In order to simplify their treatment, the fundamental 
economic causes of the World War may be classified thus: 

Anglo-German trade rivalry. 

Franco-German trade rivalry. 

The Drang nach Osten and the Bagdad Railway. 

Austrian and Italian economic ambitions. 

In aU of these the group of economic motives already 
familiar is to be observed. Out of these four springs all of 
the international friction which reached its logical culmina- 
tion in 1914. Out of the rivalry between Great Britain 
and Germany come the quarrelling over colonies and the 
growth of armaments, military and naval; out of them 
come the mutual distrust of the two nations, fear, then 
hatred, then war. In France there was the "revanche" 
because of the two lost provinces; yet even this was one 
part national sentiment to nine parts economics — princi- 
pally the question of coal and iron. "Revanche" might have 
been wholly forgotten, too, had not the German colonial 
system begun to gaU France with its machinations in 
Morocco. Out of the Drang nach Osten came a part of the 
Balkan troubles, British and French fears for commercial 
supremacy and the safety of oversea dominions. The Bag- 
dad Railway, a mere private commercial enterprise in the 



144 The Economic Causes of Modern War 

beginning, became an economic and military threat to 
France, England, and Russia. The Italian and Austrian 
ambitions for economic expansion have all added to the 
unrest in the Balkans. To Austria's own commercial am- 
bitions is due the suppression of Serbia which bred the 
resentment that found expression in an assassin's bullet 
and a world at war. 



ANGLO-GERMAN TRADE RIVALRY 

Germans and German sympathizers were convinced in 
August, 1914, that whatever the reasons alleged, the real 
cause of British entrance into the war was jealousy of the 
commercial development of modem Germany and the de- 
termination to crush at all costs the most serious trade 
rival that had ever faced the British Empire.^ The thesis 
rested on the assumption, first, that Germany and Great 
Britain were necessarily bitter foes, one of which must 
destroy the other; and second, that Great Britain, without 

^ This idea is repeated in the war utterances of leaders in all depart- 
ments of German thought, economists, historians, politicians, soldiers, 
even theologians and clergymen. It formed the main theme of Count 
Reventlow's pamphlet Der Vampir des Festlandes that Great Britain's 
consistent policy during three centuries had been to destroy her commer- 
cial rivals as they successively arose, Spanish, Dutch, French, and last of 
all the Germans. 

In his volume England and Germany, published as a defensive com- 
mentary on his earlier work, Germany and the Next War, General von 
Bemhardi again gives voice to this view, "England, this land which claims 
as its own private property all liberty, all justice, all spiritual superior- 
ity, has conspired to overthrow and destroy Germany, which never vio- 
lated England's rights. And why? Only because German commerce seems 
to be growing burdensome to England." {England and Germany, p. 76.) 

Professor Otto Hinze, the historian, of the University of Berlin, reit- 
erates the same view: "For almost twenty years the successful compe- 
tition of German industry in the commerce of the world has aroused the 
jealousy, the envy and the hatred of British business men and of the 
government which they control. . . . We desired to develop slowly in 
peaceful competition with England, until one day the older World Power 



The World War: 1914-1918 145 

resort to arms, could not stand the competition which the 
tremendous advance of Germany had brought against her. 
There is no denying that the loss of markets and the de- 
crease of trade in certain commodities, and the alarming 
way in which German goods had forced their way into mar- 
kets long regarded as exclusively British, were viewed with 

would recognize Germany as possessing equal rights in determining the 
politics of the world. This development England sought to preclude by 
the war." {Modern Germany in Relation to the Great War, pp. 53-54.) 

Friedrich Naumann, a prominent member of the Reichstag, writes: "We 
are unloved because we have found a method of work in which now 
and for a long time to come no other European nation can imitate us, 
and which consequently the others do not regard as fair." {Central Ew- 
rove, p. 118.) 

The collection of German war utterances made by the Dane, J. P. Bang, 
under the title Hurrah and Hallelujah, teems with variations on the same 
theme. The distinguished theologian, Adolf Hamack, in the compilation 
Das Grossere Deutschland (P. Rohrback, editor) declares: "England is 
leading the tremendous world war against us, and doing so from base 
competitive envy" (p. 164). 

In a collection of war sermons, Deutsche Reden in Schwerer Zeit, Otto 
von Gierke exclaims: "The tremendous progress of Germany in commerce, 
industry, etc., called forth the envy of their neighbours, and they leagued 
themselves in the infamous attempt to strangle Germany by their supe- 
rior force, an attempt emanating from the degenerate English shop- 
keeper soul, which craftily pulled the strings, until at last it summoned 
up courage for its unheard-of treachery" (p. 150). 

Dean G. Tolzien of Schwerin, in a similar compilation, Vaterldndische 
Evangelische Kriegsvortrdge, echoes the same notion: "Is there any one 
who does not know why England declared war? Why? As Russia from 
greed of power, as France from a craving for revenge, so England from 
jealousy. From shop-keeper spite. Because she wanted to earn the thirty 
pieces of silver" (p. 126). 

In this connection an extract from the famous leader in the London 
Saturday Review of September 11, 1897, is extremely apropos: "A mil- 
lion petty disputes build up the greatest cause of war the world has ever 
seen. If Germany were extinguished tomorrow, the day after tomorrow 
there is not an Englishman in the world who would not be the richer. 
Nations have fought for years over a city or a right of succession; must 
they not fight for two hundred and fifty million pounds of commerce? 
. . . England has awakened to what is alike inevitable and her best hope 
of prosperity. 'Germaniam esse delendam.' " {Saturday Review, 84:278- 
279: S. 11, '97.) That passage was widely read and long remembered 
across the North Sea. 



146 The Economic Causes of Modern War 

a good deal of consternation as well as anger in Great 
Britain. The situation was summed up by Mr. H. G. Wells, 
when he wrote: ^ 

"We in Great Britain are now intensely jealous of Germany. 
We are intensely jealous of Germany not only because the Ger- 
mans outnumber us and have a much larger and more diversi- 
fied country than ours, and lie in the very heart and body of 
Europe, but because in the last hundred years, while we have 
fed on platitudes and vanity, they have had the energy and 
humility to develop a splendid system of national education, 
to toil at science and art and literature, to develop social organ- 
ization, to master and better our methods of business and in- 
dustry, and to clamber above us in the scale of civilization. 
This has humiliated and irritated rather than chastened us, and 
our irritation has been greatly exacerbated by the swaggering 
bad manners, the talk of 'Blood and Iron' and Mailed Fists, the 
Welt-Politik rubbish that inaugurated the new German phase. 

"The British middle-class, therefore, is full of an angry, vague 
disposition to thwart that expansion which Germans regard very 
reasonably as their natural destiny; there are all the possibilities 
of a huge conflict in that disposition. . . ." 

German trade in all parts of the world had grown miracu- 
lously while English trade had developed at a rate which 
was normal enough, but which bore no comparison to the 
rapid rise of Teutonic commerce. In the forty years fol- 
lowing the Franco-Prussian War, the trade of the new 
Empu-e increased 170 per cent., while the trade of Great 
Britain increased 130 per cent. Even during the first decade 
of the Twentieth Century, when the first outburst of Ger- 
man activity was over, the rate of increase continued to be 
in excess of that of her rival on the other side of the North 
Sea. 

^An Englishman Looks at the World, pp. 36-37. This book, published 
only a few weeks before the outbreak of the war, contains some aston- 
ishingly shrewd forecasts of what has actually taken place. 



The World War: 1914-1918 147 

The rate at which this went on is easily seen in the sta- 
tistics for the years following the Franco-Prussian War: ^ 

In millions oj pounds sterling {20 marks, 1 pound) : 

United Kingdom Germany 

Imports Re-exports Exports Imports Exports 

1870 303 44 200 173 125 

18S0 411 63 223 142 145 

1890 420 64 263 214 166 

1900 523 63 291 302 239 

1910 678 104 430 465 382 

Even in the cotton trade Germany had overtaken and 
all but outstripped Great Britain, for while between 1885 
and 1886 the British port of Liverpool had handled 2,558,- 
798 bales and the correspondingly important German port 
of Bremen only 530,451, after the German progress began, 
in the single year 1911-1912, Liverpool handled only 3,690,- 
800 bales as against Bremen's 2,792,000. The long-estab- 
lished British textile industry was being hard put to it by 
the new German factories; and supremacy in the iron 
industry had long since been wrested from the United 
Kingdom, the success of the competitors being made possible 
by the Lorraine iron fields and the invention of the Eng- 
lishman, Thomas. 

Finally, German progress came to touch British pride 
and pocket-book alike at their most sensitive spot. Directed 
by Albert Ballin and his co-workers, the German maritime 
fleet began to offer serious competition on the sea which 
Britons have for generations claimed^ to rule. It is only 
a generation since Germany bought her ships in England. 
She was now building her own vessels and carrying her 
own goods in them. The Hamburg-American and North 
German Lloyd became two of the largest shipping concerns 
in the world. 

*B. E. Schmitt: England and Germany, p. 99. The German figures for 
1870 are actually for 1872, the earliest available. The statistics imme- 
diately succeeding are from the same work. 



148 The Economic Causes of Modern War 

Added to this was the poverty and misery of certain 
classes of society in the British Isles, part of which was 
due to the collapse of business enterprises owing to the 
superior efi&ciency of the competing Germans. The realiza- 
tion that twelve million people, according to the statement 
of a British publicist,^ lived on the verge of hunger, increased 
the bitterness which the English felt. The seriousness of 
German rivalry was kept before their attention by the con- 
tinued discussion of measures proposed to keep the Ger- 
mans from securing the markets that were left to imperial 
Britain. 

It is absurd, on the other hand, to regard the British 
Empire as completely outstripped in the economic contest 
and because of its hopelessness forced to resort to arms and 
appeal to the strength of its superior fleet in order to main- 
tain its position in the economic world. The figures for 
export and import of the two countries in the years between 
1899 and 1913 give the lie to this without need of further 
argument : ^ 

In millions oj pounds sterling: 

United Kingdom Germany 

Imports Re-exports Exports Imports Exports 

1899 485 65 264 289 218 

1900 524 63 291 302 239 

1901 522 68 280 286 225 

1902 528 65 283 290 241 

1903 543 69 291 316 255 

1904 551 70 301 343 265 

1905 565 78 330 372 292 

1906 607 85 376 422 324 

1907 645 92 426 450 355 

1908 593 80 377 404 324 

1909 625 91 378 443 343 

1910 678 104 430 465 382 

1911 680 102 454 477 405 

1912 745 112 487 550 454 

1913 769 109 525 534 495 

^Sir Hugh Campbell-Bannerman, in his speech at Perth, June 5, 1903. 
'B. E. Schmitt: England and Germany, p. 102. 



The World War: 1914-1918 149 

It is evident at a glance not only that Great Britain has 
been in the lead so far as volume of business is concerned 
but also that, except for the depression resulting from the 
Boer War, her rate of increase has not been very far behind 
that of her rival. 

In 1914 Germany was having economic difficulties of her 
own. The period of expansion with which the year 1912 
had opened was followed by disaster because of railway dis- 
organization, and the financial difficulties resulting from the 
war in the Balkans. Shortage of capital, which had first 
made its appearance at the time of the Agadir crisis, was 
very noticeable in 1913, reaching such an extent that gov- 
ernment bonds did not readily secure buyers. The value 
of the new industrial enterprises decreased from 134,000,000 
pounds in 1911 and 146,000,000 pounds in 1912, to 87,000,- 
000 in 1913. Westphalian manufacturers were compelled to 
reduce production; Bavarian industries were in difficulty; 
and the baskets, cane, furniture, granite, and paint which 
had been going to the British market were supplanted by 
British manufactures. The unemployment problem was 
beginning to show itself at the same time that the cost of 
living rose. 

The existence of such a situation makes it evident that 
Great Britain could not possibly have been solely actuated 
in entering the war by mere trade jealousy. This fact is 
even more clearly shown by the opposition of more than 
half the British manufacturers to a protective tariff, which 
would have ended the difficulty with German "dumping" 
and would have lessened the severity of competition gener- 
ally. There were the best of indications in 1914 that the 
worst danger from Germany to British commerce was 
over; and at all events the cost of the war was far greater 
than any economic loss could have been. 
Yet no one can seriously deny that the commercial rivalry 



150 The Economic Causes of Modern War 

had both directly and indirectly a very considerable influ- 
ence in producing the war, even though in itself alone it 
might not have produced the four years of fighting. It 
fostered bitterness and ill-feeling between the two coun- 
tries, and — a fact of especial importance^ — it was the pri- 
mary cause of the naval rivalry which led to the fear of 
German invasion — a veritable nightmare among a certain 
class of Englishmen/ 

The German navy was built as German commerce grew 
and German colonies and trade routes needed protection. 
It was a response to an economic need, but it was also 
a threat to the very existence of the island empire that 
can live only so long as its fleet controls the seas. It 
is not possible within the limits of this essay to trace the 
rise of Germany's fleet and the alarm which it occasioned in 
England. [The important point for our purposes is that 
it was the inevitable outcome of the spread of German com- 
merce over the globe, and that the naval rivalry which had 
so very much to do with causing the Great War is really 
only a slightly disguised kind of economic rivalry. 

y 
FRANCO-GERMAN TRADE RIVALRY 

Prevalent ideas regarding the relations between France 
and Germany since the cession of Alsace and Lorraine in 
1870 have been so colored by the "revanche" that it offers 
the most convenient starting point for a discussion of the 
points of economic friction between the two countries. The 
"revanche" has been popularly thought of as a matter of 
national sentiment, and the eyes of the world have been 
fixed oftener upon the wreaths before the statue of Strass- 

^ Richard Harding Davis's story of three college boys who don German 
uniforms, terrorize the United Kingdom, and cause a complete mobiliza- 
tion of the British army, is an exaggeration, to be sure, but not a dis- 
tortion of the British state of mind. 



The World War: 1914-1918 151 

burg among the cities of France, than upon the iron fields 
of Lorraine. 

The French desire for the re-possession of Lorraine has 
been due to something besides the natural patriotic desire 
to see the lost provinces again under the tricolor, just as the 
desire of the Germans to retain it has been due to a per- 
fectly practical and unsentimental appreciation of its value. 
From the mines of Lorraine came 21,000 of the 28,000 tons 
of iron ore that Germany was consuming annually. Be- 
sides the iron, there are coal deposits in these territoriies 
sufficient, when combined with the output of the West- 
phalian deposits, to provide the entire German Empire 
with all the fuel that is required by all its industries. 

The Germans, notwithstanding, desired more than they 
already possessed of the French iron fields, for their geolo- 
gists in 1871 had made the fatal blunder of supposing that 
all the iron ore on the Briey plateau was inside the boundary 
line fixed by the treaty. Subsequent discoveries showed that 
by far the richer deposits stiU remained in French hands. 

Since 1900 the French iron fields at Briey have con- 
tributed heavily to the republic's production of ore. 
Since 1907 France has ceased to be an importer of iron 
and has begun exportation to Belgium, Holland, and Ger- 
many itself. The German business men, who sought both 
to check French expansion and to reap what advantage they 
could from the situation, had by 1910 acquired partial 
control over about one-fifth of the Briey mines.^ 

In 1910 Germany possessed 3,608,000 tons of ore remain- 
ing in the mines scattered in various parts of the Empire, 
as against 3,300,000 tons of French ore in mines temptingly 

^Krecke: "Eisenerz und Kohle in Franzosisch-Lothringen," Stahl und 
Eisen, 1910, p. 8. Quoted by E. F. Gay: "French Iron and the War," 
Military Historian and Economist: i:308: Jy., '16. 



152 The Economic Causes of Modern War 

close to the German frontier.^ It was these mines that 
during the recent war determined the German strategists 
to win Nancy and to hold the Briey and Longwy basins 
at all costs. 

One circumstance alone hindered the French: their de- 
pendence for coal upon the deposits of Westphalia. In this 
respect their iron industry remained subject to a degree 
of German control, a situation which it was in their power 
to remedy by purchases in the English market and by 
further development of their own resources. 

The immense development of the German iron industry 
is due to the discovery of the English metallurgist, Sidney 
Gilchrist Thomas. The Lorraine ores contain a great deal 
of phosphorus, which unless removed from the steel in the 
process of converting, renders it too brittle to be of use. 
The Bessemer process, based on experiments with the Eng- 
lish ores, which are free from phosphorus, could not effect 
this removal, and consequently the value to the German 
Empire of the recently-seized Lorraine iron fields was im- 
paired. The necessity for importing either the purer 
grades of ores from Spain and Sweden, or else Bessemer 
steel already converted from England, had hindered German 
industry. 

Thomas, who had studied the problem of the elimination 
of phosphorus since 1870, reached a practical solution in 
1875. He secured the co-operation of his cousin, Percy 
Gilchrist, and in 1877 took out his first patent, making 
formal announcement of his new method in 1878. His 
invention, which employed a lining of magnesia or mag- 
nesia limestone in the converter, attracted little attention 
in England; but it was regarded as of so much importance 
among Continental iron-masters, to whom the phosphorus 

'"Iron Ore Resources of the World," Stockholm, 1910: i:xxv. Also 
quoted by Gay, loc. cit. 



The World War: 1914-1918 153 

problem was of dire importance, that a single steamer is 
said to have brought two applicants for his patent rights. 

The tremendous impetus which gave Germany world 
supremacy in the iron industry within a comparatively short 
period, dates from this year. The Bessemer process had 
been practically valueless to the Germans. Once the new 
method was adopted, the Lorraine fields, where iron and 
coal lay near together, were almost ideal for iron production. 

The iron and coal which were making the wealth of 
Germany prior to the beginning of the war in 1914, and 
which she guarded so carefully that she retained the use 
of them during most of the period of hostilities, were in the 
very territory which had been wrung from France. From 
lack of the minerals that were being mined in territories 
that they regarded as being rightfully their own, the French 
until 1907 found their industries gravely hampered. Even 
the enormous development of the iron fields in the Meurthe- 
et-Moselle district, which the Germans failed to take in 
1870, did not reconcile them to the loss of the Lorraine 
fields. 

This is one of the reasons why the policy of "revanche" 
did not die out. In the minds of the people "revanche" 
meant a patriot's desire to see the hereditary foe humbled 
and the lost provinces again restored to France. But in 
the minds of the masters of French industry and the jour- 
nalists who formed the popular mind, "revanche" — what- 
ever else it may have meant — implied the restoration with- 
in French boundaries of the deposits of coal and iron 
which industrial growth demanded, and the protection of 
the fields which were already theirs. 

The situation of the British steel manufacturers was 
equally precarious, although few of them realized it until 
long after the Thomas process had been adopted abroad. 
At first confident that the United Kingdom's leadership in 



154 The Economic Causes of Modern War 

the production of steel by the Bessemer process would never 
be menaced, they presently found their rivals across the 
North Sea developing the business at a rate far exceeding 
their own. Between 1890 and 1910 the German steel busi- 
ness grew approximately seven times as rapidly as the 
British in actual production.^ The German iron-masters 
equalled the British in 1893, and at the outbreak of the war 
were producing about three times as much as their quondam 
superiors. Even in the production of pig iron, where the 
Thomas process gave no advantage, the production equalled 
the British in 1903, and was double its volume in 1912. 
The Germans had regained the supremacy in iron which 
they had enjoyed before the Thirty Years' War. The situa- 
tion was almost as galling to the British manufacturers as 
it was to the French. 

The Morocco question, which repeatedly led Europe to 
the verge of war, was partly a result of the Franco-German 
conflict over iron. Moroccan exports are mainly agricul- 
tural ; but the German iron-masters, facing a probable short- 
age of ore in the very near future and casting about the 
world for deposits from which to make up their lack, 
coveted the mines, as yet unworked, known to exist in 
that country. Besides the iron, there were copper, lead, 
antimony, silver, gold, and sulphur deposits available for 
the Power that could secure to itself the mastery there. 

Dominance in Morocco, situated conveniently on the 
opposite littoral of the Mediterranean, meant to France an 
opportunity for building up her colonial trade still further; 
and — in view of her almost stationary population — the 
prospect of obtaining from the warlike tribesmen of the 
country, native troops with which to meet the German 

^ These and the following figures are taken from an article by Pro- 
fessor Hermann Schumacher of the University of Bonn, "Germany's In- 
ternational Economic Position," in Modern Germany, p. 105. 



The World War: 1914.-1918 155 

attack which sooner or later had to come. The deposits 
of iron and the possibility of agricultural development 
were as attractive to the French as to the Germans. Moroc- 
co was, moreover, the outlet for the commerce of Northern 
Africa and the Sahara. 

Because its frontiers marched with those of the other 
French African possessions, and because of the ready access 
by sea from France, it was the next logical step in the colo- 
nial policy of France. Great Britain, enjoying the second 
largest share in the country's trade, had given up her claim, 
and had in the agreement of 1904 tacitly admitted the pros- 
pect of the entrance of the French. A similar agreement 
with Spain recognized the prior rights of France. 

The German share of Moroccan commerce averaged only 
about nine per cent of the yearly total. The future pros- 
pects of the iron trade, to which strategic and political con- 
siderations were added, were the mainsprings of the Em- 
pire's policy. Morocco was peculiarly desirable to an over- 
populated country because it was one of the few portions 
of the earth's surface suited to habitation by white men, 
and as yet unoccupied. Strategically, the establishment 
of a German protectorate would have been dangerous to 
the French possessions in Algiers and to the sea routes to 
France. Politically, it was felt that the security of the 
German Empire required a constant reminder to the rest of 
Europe of the fact of Teutonic hegemony. Practically, 
these considerations took the form of constant thwarting 
of French economic aspirations in Morocco. 

Although the iron rivalry and the friction in Morocco 
were the chief reasons for the ill-feeling that ended at last 
in war, commercial relations on the Continent itself did not 
tend to lessen the tension in the relations of the two states. 
England, Belgium, and Germany, by the logic of geography, 
are the principal customers of France. Even when the 



156 The Economic Causes of Modern War 

French dependence on the Westphalian coal deposits is set 
aside, the commercial relations existing between the two 
chief political rivals of Europe were necessarily close. 

It was not a comfortable situation. There were large 
numbers of the smaller French manufacturers whose sales 
did not extend beyond the limits of the republic ; and these 
men, knowing that their own trade could not be injured, 
and finding themselves hampered by the German importa- 
tion, were ever ready to encourage agitation against the 
purchase of German goods. In many sections of the press 
and in certain governmental circles, they found ready 
encouragement. 

In France as in England, as the growth of German in- 
dustry continued, Germany's capacity for turning out 
articles which were serviceable, if not perfectly made, and 
for selling them at low price, gravely affected domestic 
merchants. The same device to counteract this was adopted 
as in England. Imported goods were stamped with the 
name of the country of their origin, a measure which did 
not in the least serve to restrict the spread of the German 
goods, and may even have been useful as an advertisement. 
When the French sought to boycott German products, 
they found the same device being employed against them- 
selves across the Rhine. 

After the Agadir crisis there was another effort in France 
to check the progress of German economic infiltration. As 
a result, French sales in Germany remained almost sta- 
tionary, while German sales in France climbed steadily. 
The failure of this attempt is evident in the statistics which 
show Germany and France nearly even in their mutual 
exports and imports in the year before the crisis, and Ger- 
many cHmbing rapidly ahead in the years afterward. The 
French had barely abandoned their futile policy of commer- 



The World War: 1914-1918 157 

cial hostility when the World War burst upon them. Re- 
duced to tabular form, the sales of the two countries for 
the years 1910, 1911, and 1912 stand as follows: ^ 

France to Germany Germany to France 

1910 804,000,000 francs 860,000,000 francs 

1911 819,000,000 965,000,000 

1912 814,000,000 981,000,000 

German tariffs were cleverly devised to close the frontier 
against the importation of many articles. By analyses of 
wines, demanded under conditions which, by indirect means, 
made importation to Germany difficult, and by similar 
devices of the same sort, the Germans contrived to throw a 
network of hindrances around French business, while at 
the same time finding it possible to keep their own goods 
flowing into France. Efforts by the French to retaliate in 
kind were not successful ; and in most cases the conflict hurt 
their commerce rather than that of the Germans'. Part 
of the French difficulty was undoubtedly due to the poor 
organization of their commercial service in foreign coun- 
tries. In Germany this was organized in a single bureau 
in the Foreign Office, while in France it was parcelled out 
among the Ministries of Finance, Commerce, and Foreign 
Affairs. 

Such was the motivation of the series of crises which led 
nearer and nearer to war at Tangier in 1905, after the Alge- 
ciras Conference in 1906, at Casablanca in 1908, and at 
Agadir in 1911. In each case the fundamental issues were 
economic, in each case only a spark was needed to create 
a world war, yet not until 1914 did the final impetus come, 
though all had been prepared by many years of economic 
hostility. 

^ These figures are adapted from M. Ajam's book, Le Probleme Eco- 
nomique Franco-Allem,and, p. 11. 



158 The Econojnic Causes of Modern War 

THE "dRANG NACH OSTEN" 

One of the most evident phenomena attending the Ger- 
man economic expansion was the Drang nach Osten, or 
trend toward the East, which had come about from nat- 
ural economic causes and had finally been incorporated into 
the conscious policy of the Empire. It might properly be 
used to include the economic penetration of Russia which 
had been going on for many years when the Great War 
broke out in 1914; for without political action of any sort, 
but by a mere process of infiltration, the Germans had come 
to control a large part of Russian industry and commerce. 

More generally, however, the phrase is used to indicate 
the German effort gradually to build up at least an eco- 
nomic bloc, and if possible to exercise political power at the 
same time, in the more or less defined territory known as 
Mittel-Europa. With Germany, and more particularly 
Prussia, as a nucleus, it was proposed to build up an Em- 
pire which should extend from the Baltic to the Persian 
Gulf. The Teutonic blood of Austria was to be included, 
economic and political relations with the Balkan states were 
to be so manipulated as to bring them under Teuton domi- 
nance; the Turkish Empire was to receive the same treat- 
ment; and through the agency of the Bagdad Railway, all 
of Asia Minor and the Tigris-Euphrates valley were to be- 
come the domain of German trade. 

/The extremists believed that this new and compact state 
should include among its northern ports, Amsterdam, Rot- 
terdam, and Antwerp, — geographical and economic parts of 
the German Empire, whose political separation was an ac- 
cident against which Germany became increasingly restive 
as her commerce grew. Salonika and Trieste were looked 
upon as potential German ports to the south.) 

With a population of more than 80,000,000 and with im-. 



The World War: 1914-1918 159 

mensely strengthened frontiers, with an internal market 
nearly as large as that of the United States, and with an 
impetus to industry which would result from the immense 
enlargement of the Zollverein, the German Empire would be 
strengthened to such a point that she could defy the whole 
world, whether in armed or economic warfare. 

The importance attached to the Tigris-Euphrates valley 
was agricultural. Here was the home of the earliest civi- 
lizations known to man. This area had at one time sup- 
ported a large population, and preliminary agricultural 
survey seemed to indicate that only proper scientific 
administration would be required to make it do so again. 
German efficiency was to be used in the building up of 
an irrigation system which would literally make the desert 
blossom like the rose. 

In Mittel-Europa's new territories were to be produced 
the supplies which would solve the food problem and the 
raw materials problem of Germany. Here her settlers 
would find the outlet denied them in the unhealthy German 
colonies, unsuited to white settlers; and here also there 
would open new markets for German industry. 

Mittel-Europa was to become an economically self-suf- 
ficing unit. In its southern and eastern extremities it 
would have its new and undeveloped lands — new lands be- 
cause they were so very old that the traces of their former 
development had all but disappeared. At the northern end 
would be the centre of governmental control and admin- 
istration, the industries which the raw materials from the 
east and south would feed, and for which they would af- 
ford markets; and here also would be the denser indus- 
trial centres of population in the hoped-for state. 

In the Ukraine the new state would find additional iron 
ore, wheat, hemp, and the raw materials for textiles. Of im- 
mense importance were the large deposits of manganese, 



160 The Economic Causes of Modern War 

a rare metal almost wholly lacking in Germany, necessary 
to the development of an independent steel industry, of 
which the Empire had been importing 500,000 tons a year 
before the war. From the Caucasus, which was to be 
joined to Turkey, would come more manganese and copper, 
and from its famous wells the oil that is all-important to 
modern industry and to modern navies. Raw cotton also 
was to be had here, and the territory offered an opportunity 
for economic penetration of Central Asia. 

The possession of the Baltic provinces and of Poland 
would add pohtical domination to economic penetration al- 
ready effected, and would also assure the supply of flax, 
a textile utilized by the Germans to supply the wool and 
cotton which they lack. At least a measure of economic 
control over the Rumanian grain and oil fields was also 
contemplated. 

Since even this would have left the new Teutonic Em- 
pire at a loss for such products as rubber and vegetable 
fats, a measure of tropical expansion — possible in the mod- 
ern world only at the expense of other colonizing nations 
— must have been contemplated. 

The development and extension of the Bagdad Railway 
would link Berlin, Byzantium (Constantinople called by 
its old name for the sake of the alliteration) and Bagdad, 
so that the whole new Empire would be closely bound 
together by rapid transport. Outlets to the sea would not 
be lacking, in the Baltic and the North Sea, in the Mediter- 
ranean, and far to the south in the Persian Gulf. Com- 
merce with the north, east, south, west, to all the ends of 
the earth, would be open. 

Intimately linked with this whole scheme, and so es- 
sential to it that one cannot be discussed without the other, 
was the Bagdad Railway, or the "BBB" as it came to be 
called from the three cities which it was to link. 



The World War: 1914-1918 161 

THE BAGDAD RAILWAY 

The history of the Bagdad Railway may be dated from 
the year 1888, when a concession was granted by the Sul- 
tan's government to the Societe du Chemin de Fer Ottoman 
d'Anatolie, a syndicate of Germans, for the construction of 
a railway line from Haidar Pasha to Angora, a total dis- 
tance of 576 kilometres (about 360 miles). At the same 
time a short railway line which had been built a few years 
before to give the Sultan readier access to his shooting 
box, was taken over by the company and made a part of 
the new line, which was under construction between 1889 
and 1893, when it was finally completed. No sooner had 
this been accomplished than a further concession was made, 
permitting the extension of the line as far south as Konia. 
Work on this section was completed in 1896. 

By this time the internationally important possibilities 
of the new line (which appears in the beginning to have 
been a mere commercial venture without international sig- 
nificance) were beginning to be apparent in Europe. In 
1898 the Kaiser paid a visit to the Sultan, which bore fruit 
in the following year when announcement was made of a 
concession for the extension of the new railway clear across 
Asia Minor with a terminus at the head of the Persian 
Gulf. In the same year Great Britain quietly established 
a protectorate over Koweit, a tiny principality under the 
partial suzerainty of the Sultan, which offered the most 
logical terminus for the railway. In 1902, three years after 
the railway scheme had been officially announced by the 
German company, the Sultan gave his final approval. In 
the following year, German tentative offers were made to 
the French and the English for their participation in the 
construction of the railway, the offer being intended to 



162 The Economic Causes of Modern War 

show that the building of the road had no sinister economic 
significance. Although both the English and the French 
Governments had at one time or another taken a friendly 
attitude toward the project and had been on the point of 
entering into it, the popular protests or those of financiers 
who perceived the danger to India and the colonial pos- 
sessions menaced by the railroad, had in every case been 
too strong. So bitter, indeed, was the feeling in France 
that the stock of the corporation was not admitted to 
sale in the Paris Bourse, although very considerable French 
investments in the company were made some years later. 

Their offers having been refused, the German company 
began the construction of the new line alone, and in 1904 
track was laid to Burgulu in the Taurus Mountains and 
the task of tunnelling through them was begun. Having 
gone thus far, the Germans suspended work for a period 
of five years, resuming their construction in 1909. Two 
years later, the British, regretting their precipitancy in 
neglecting the German offer of participation in the build- 
ing of the road, made a settlement whereby they were to 
construct the connecting line from Bassorah to the Per- 
sian Gulf. As the result of a visit of the Tsar to Potsdam 
in December, 1910, Russia in the following summer with- 
drew her opposition to the railway, indicated her willing- 
ness to build connecting lines in Persia, and later turned 
over her reservations for construction in northern Asia 
Minor to a group of French financiers. In 1912 German 
lines were laid eastward from Aleppo and reached as far 
as the Euphrates valley, and in 1914 a line was laid east- 
ward from Bagdad. 

The railway had gradually become a part of the Ger- 
man Drang nach Osten, although it is almost certain that 
when originally begun it was what it professed to be, a 



The World War: 1914-1918 163 

commercial scheme, pure and simple/ It is evident, how- 
ever, that the possible economic and political importance 
of this line had come to be realized by the Foreign Ofl&ce 
at Berlin, and that the government stepped in behind the 
financiers. In no other way can the part which the Kaiser 
played in 1898 be interpreted. 

The completion of the railroad as proposed would be 
of the very greatest importance to Germany. Financed by 
German business men and built by German engineers, it 
would mean extremely large orders for supplies, placed 
with German firms, and a correspondingly large boom in 
German industry. The proposed line was to be some- 
thing over 1,700 miles long, and was to throw out impor- 
tant branch lines to Smyrna, Alexandretta, Aleppo, Damas- 
cus, and Mecca, thus binding Asia Minor solidly into one, 
and doing the binding with German bonds. Although no 
formal sphere of German influence had been set up, it was 
evident that the completion of the road could not fail to 
have this effect. 

The German business men who were building the line 
were protected against loss by an agreement with the 
Turkish Government, which guaranteed 4,500 francs per 
kilometre for the construction of the line, an arrangement 
under which they profited handsomely, selling their priv- 
ileges to a subsidiary company for 3,200 francs and retain- 
ing the difference. It was realized from the very begin- 
ning (in England with much disquietude) that the coun- 

^ Baron von Hertling even declared that the main motive of the Ger- 
mans was interest in archeology! On April 30, 1907, he said: "It is true 
that a German corporation obtained the concession for this railway from 
the Ottoman Government in 1904, and we have every inducement to use 
German capital in opening up that old centre of civilization for the 
purposes of science and exploration, but that political considerations are 
involved would never occur to me." W. H. Dawson, Evolution of Mod- 
ern Germany, p. 346. 



164 The Economic Causes of Modern War 

try could not afford a traffic heavy enough in the begin- 
ning to pay the cost of the management nor the very con- 
siderable guarantees of operating expenses which the Turks 
had made; but it was certain to stimulate trade and to 
facilitate the movement of the population to the interior 
of Asia Minor. 

To Germany it meant a solid steel band of German in- 
fluence from Constantinople to Bagdad, and eventually, 
from Berlin to Bagdad. If the scheme of Mittel-Europa 
became a reality, the "BBB" of which the Germans talked 
so boastfully in the cafes would be realized. Germany was 
to be dominant economically and politically in an enor- 
mously rich region which was in the end to solve many of 
the pressing problems at home with one stroke. Over- 
population, the need for markets, food, and raw materials, 
— they would all be taken care of. The carrying trade of 
the road might well include, also, a portion of the trade to 
India, which might be diverted from the slower water route 
through the Suez Canal to the fast overland railway service. 

The Bagdad Railway, which has been called the most 
important single cause of the Great War, is the creation 
of geography. From Haidar-Pasha on the coast of Asia 
Minor opposite Constantinople, south through the Taurus 
Mountains, east to Moussoul, and thence south down the 
Tigris to Bagdad, it follows a route that gives the power 
that holds it the possession of all Asia Minor. To hold this 
small western extremity of Asia has always been of the 
highest strategic importance, since from it attack can be 
launched speedily and successfully at any time, either to 
eastward or to westward. To control Asia Minor is to 
command Egypt, Syria, and Palestine on one side, and all 
of the potentially fertile Tigris-Euphrates valley and the 
open sea route to India on the other. 

The earliest records of the race show Asia Minor play- 



The World War: 1914-1918 165 

ing this role of the decisive Hinterland, the actual key to 
the more fertile and important lands that border it on 
either side. As early as 1900 B. C, Hittite warriors from 
the rugged lands of Asia Minor were menacing Assyria, 
Babylonia, and Egypt. The conquerors of the ancient 
world, marching to their victories, passed by the route which 
centuries later modern engineers were to lay out for the 
Bagdad Railway. To Alexander the Great this route 
opened the way for the conquest of India. The first bat- 
tles of the Crusaders were fought in the heart of Asia 
Minor — Nicea, Antioch, and only after that Jerusalem. 
Then as now, the all-important Hinterland dominated com- 
pletely the regions lying along its borders. 

It was because of this domination that Great Britain 
objected to the building of the proposed road, one terminus 
of which would be within twelve hours of Egypt and the 
other only four days' voyage from Bombay. The building 
of the railway would yield German industry profit from 
the supply of material; and the gradual opening up of 
the country to the commerce of the Empire would keep 
the German power perpetually at the doors of the two 
most important British dependencies. The safeguarding 
of the route to India — a consideration of the highest eco- 
nomic importance, largely dominant in the foreign policy 
of Great Britain for a full century — was again uppermost. 

The adroitness with which the British had secured a pro- 
tectorate over Koweit, with deep harbors and excellent 
docking facilities, the most available of the two possible 
termini for the road at the head of the Persian Gulf, had 
in some measure offset this danger. The Germans would 
now be forced to establish themselves at Fao, the one re- 
maining town, if they were to reach the Gulf at all, and 
the new British protectorate would serve admirably at 
any time as the basis for naval action against them. 



166 The Economic Causes of Modern War 

The Germans never reached the Persian Gulf. Imme- 
diately before the outbreak of the World War, an agree- 
ment was made whereby Germany was to have economic 
and financial control of the railroad only as far south as 
Bagdad; the line south to Bassona was to be international; 
and Great Britain was to control the road thence to the 
Persian Gulf. With the outbreak of the war, all the years 
of effort came to nothing. 

These semi-political and semi-economic causes for the 
British objections to the building of the railroad do not 
exhaust the purely economic objections which existed quite 
apart from the tacit threats to Egypt, the Suez Canal, and 
India. In several directions the completion of the road 
would be a blow at British business interests which the 
British Government was resolved to prevent if possible. 

The guarantees which the Turkish Government had made 
to the entrepreneurs of the new railroad were obviously too 
liberal, in view of its probable earning capacity for years 
to come. It was clear that the finances of the Turkish 
Government would be subjected to a severe strain to meet 
the kilometric guarantee, and that in order to do this the 
taxation would have to be increased. A part of the bur- 
den was certain to faU upon British commerce, which was 
very extensive in Turkey, and which, being — as the Brit- 
ish alleged — better made and certainly more expensive than 
the competing German commodities, would be less capable 
of maintaining the foothold already won. The trade mark 
"Made in Germany" was already pushing the British prod- 
ucts hard enough in other parts of the world. If the Bag- 
dad Railway was to increase the severity of German com- 
petition, the British public would have none of it. 

If, too, the kilometric guarantee were to increase fur- 
ther the difficulties and confusion of Turkish finance, Brit- 
ish investors, who held considerable interests in these re- 



The World War: 1914-1918 167 

gions, had reason enough to desire to see the building of 
the road checked. 

There was still another reason for the British objections 
to the completion of the line. Britain, as a maritime power, 
had for years held the monopoly of the carrying and pas- 
senger trade of the world afloat. In late years the develop- 
ment of the German maritime power had threatened this. 
Now the prospect of a partial diversion of travel from the 
British merchant fleet plying through the Suez Canal to 
India and the East was a further blow, alike intolerable to 
the pride and the pocket-book of the British. 

Economic considerations were equally powerful in preju- 
dicing the French against the railway, even though the 
company had in 1902 offered to assign to French capitalists 
40 per cent, of stock, the same amount that had been re- 
served for the Germans. The Bagdad Railway was a Ger- 
man undertaking and the power for its management was 
certain to be retained in German hands. It would inevit- 
ably end in the establishment of German economic domina- 
tion in the region which it traversed. The French had an 
economic domination of their own along the Mediterranean 
coast of Asia Minor from Smyrna to Beirut. For a time 
they might be able to hold their own, because of their direct 
access by waterways to this district, but in the end it was 
realized that the German control of the aU-important 
territory covered by the railway, would seriously threaten 
this influence if it did not annihilate it entirely. 

The equable partition between Germany and France of 
the trade of Turkey was a hopelessly Utopian proposal, for 
there was no doubt as to the increasing importance of Ger- 
many, not only in Constantinople but throughout Asia 
Minor. The importance of maintaining French prestige in 
the Orient was itself a commercial necessity, for out of it 
an increase of commerce was to grow. 



168 The Economic Causes of Modern War 

For centuries the French had held their own in this re- 
gion, and had even built railways from the coast for short 
distances into the interior, notably the Smyma-Kassaba 
line, which came under French influence in 1893, the Mer- 
sina-Adana line, in which there were large French holdings, 
the line from Jaffa to Jerusalem, which was exclusively 
French and was built in 1892, the Beirut-Damascus line 
(later extended north and south until it totalled 361 miles) 
completed in 1910. 

Railways projected by the French would have built up 
a complete system touching the holy cities and reaching 
the profitable passenger traffic of pious Moslems who are 
quick at catching at western means of shortening the pil- 
grimage to Mecca, which every good Mohammedan makes 
at least once in his life. The French roads would have in- 
cluded 1,000 miles of rail, and would have been almost as 
ambitious as the German project. They had been designed 
to spread French economic influence and to promote the 
fortunes of French commercial houses; but the comple- 
tion of the Bagdad road would necessarily lead to their 
absorption and Germanization. 

In ways even more direct, French prosperity would be* 
affected. A great deal of the English travel to India went 
by way of Marseilles instead of taking ship at Liverpool. 
This meant that the travelers passed through most of 
France on their way and this constant stream enriched the 
French railways, hotels, and merchants by sums which were, 
taken in aggregate, very considerable. But if the Bag- 
dad Railway became a reality and evolved into the pro- 
posed Berlin-to-Bagdad route, a large part of this travel 
would be lost to France, for the tourists would then take 
the more direct route by way of Ostend, Cologne, Munich, 
and Vienna. The profits which the thrifty French were 
accumulating would go to the hated Germans. 



The World War: 1914-1918 169 

In Russia there were the gravest possible military rea- 
sons why the Bagdad Railway should not be built. As 
matters stood, Russia was in control of the theatre of a 
possible war against the Turks. War vessels of the Black 
Sea fleet could leave either Sebastopol or Odessa as a base, 
and could appear before the defenses of Constantinople 
within thirty or forty hours' hard steaming. In the event 
of war, Russian attack by land could be directed against 
Erzerum, Sivas, and Angora, and although this would in- 
volve fairly long marches, the difficulties of transport in 
the way of Turkish mobilization were such that the Slavic 
armies could reach these strategic points in force before 
the Turks could concentrate. The Bagdad Railway, es- 
pecially if run via the northern route at first proposed and 
then abandoned by reason of Russian protests, would 
change all this and would make it possible for Turkish 
forces to be concentrated with much more rapidity than 
before. The value of Asia Minor as a reservoir of mili- 
tary strength for the Sultan had hitherto been impaired 
because of the difficulties involved in transport. In the 
Russo-Turkish War in 1877 the Turkish 6th Army Corps 
reached the line only after two months of forced marches, 
with great loss of effectives, and too late to be of use. Had 
the Bagdad road been in existence at that time, Russia 
might have lost the war. 

The new road struck also at Russian economic interests, 
especially in view of the project for the construction of 
a branch of the great Trans-Siberian Railway into the Cau- 
casus. Great quantities of traffic would certainly be di- 
verted from the proposed Russian railroad. As in the case 
of all the other Powers, the increased German dominance 
certain to result from the economic penetration of Turkey 
and Asia Minor would serve to check what progress Rus- 
sia had already made and to forbid all hopes for the future. 



170 The Economic Causes oj Modern War 

Even the allies of Germany were fearful of the Bagdad 
scheme, which meant in the end German predominance 
throughout the Balkans. Since the trend of Austrian eco- 
nomic development was southward, the government looked 
without favor on undue extension of German economic in- 
fluence through the very lands where its own ambitions 
lay. Italy, likewise, though not directly affected, had had 
enough experience with the Salonika-Monastir line, Ger- 
man-controlled throughout, and with German methods of 
economic penetration as demonstrated in the Banca Nazi- 
onale, which though Italian-owned was German-controlled, 
to be fearful both of too great German preponderance and 
of interference with Italian ambitions in Albania and es- 
pecially as regarded Salonika. 

In this way it came about, through the mutual eco- 
nomic rivalry, greed, and distrust of the Great Powers and 
of the merchants who are their citizens, that the Bagdad 
Railway, in itself a great commercial enterprise with tre- 
mendous capacities for usefulness, was the bane of 
Europe for nearly twenty years. It is another illustration 
of the working of economic pressure in international rela- 
tions and the importance of economic highways. The route 
which the railway followed was the key to the East which 
all the Powers coveted. 

AUSTRIAN AND ITALIAN ECONOMIC AMBITIONS 

The economic relations of Austria before the World War 
were closest with Hungary, her partner state in the Dual 
Monarchy, and with her ally, the German Empire, Al- 
though points of conflict between the German and Aus~ 
trian economic policies existed, economic partnership had 
in the main been added to political alliance, — an arrange- 



The World War: 1914-1918 171 

ment without which the Mittel-Europa scheme would have 
been impossible. 

Austria and Hungary, the two members of the Dual 
Monarchy, are mutually complementary economic units, 
Hungary being chiefly an agricultural and Austria chiefly 
an industrial state. Between 1884 and 1891, nearly 84 per 
cent, of Hungarian imports came from Austria, whilst 71 
per cent, to 75 per cent, of Hungarian exports went to 
Austria. In later years even this slight disproportion van- 
ished, so that the statement could be made in November, 
1906, that Hungary exported nearly 40,000,000 pounds ster- 
ling of agricultural produce yearly to Austria, and received 
in return almost the same amount of manufactured 
products.^ 

The disruption of the Dual Monarchy would be nothing 
short of a catastrophe for Hungary, which is hampered in 
her outlook to the sea and surrounded by other agricul- 
tural states, which have no need for her cereals, cattle, and 
other raw products. To a less extent, through the loss 
of markets and the increase in the price of agricultural 
products, Austria is equally bound to Hungary by eco- 
nomic forces. Each is necessary to the other, and each 
suffers the same difficulty in gaining access to the sea. 

No more striking example than this could be found of 
the importance of economics in promoting either peaceful 
or hostile relations between states. In spite of their racial 
differences and the very serious disagreements that at times 
have arisen, these two dissimilar states are held together 
by their very dissimilarity, the perfection with which each 
is the economic complement of the other. The strength of 
the economic bond in such a case serves only to empha- 
size the power of economic rivalry, when it exists, in causing 
and embittering the hostilities of nations. 

* Geoffrey Drage : Austria-Hungary, p. 202. 



172 The Economic Causes of Modern War 

Like Germany, Austria looked southward for the future 
development of her markets. An industrial state, she 
found in the backward states of the Balkans lying at her 
doors, the agricultural, non-industrial peoples whose prod- 
ucts were of use to her and who could buy her own sur- 
plus. To this end was directed the Austrian policy of con- 
tinuous meddling in the Balkans, for the continuance of 
supremacy there was all-important to her industries. 

Cut off as Austria was from access to the sea, with only 
a few ports on the Adriatic, the Balkans offered the most 
accessible territory for' economic penetration. The great 
highway of the Danube led to the heart of their most fer- 
tile regions. In the very nature of things, Austria could 
not look for a world-wide commerce such as that of the 
more fortunate states with more complete approach to the 
great highways of the world. Even her efforts to secure 
additional ports on the Dalmatian coast (although they 
might, had they been successful, have lessened the friction 
rising from her interference in the Balkans) brought her 
inevitably into conflict with Serbia, equally desirous of out- 
let in the same territories, and with Italy, seeking them as 
a base for entrance into Balkan markets. 

In Serbian trade the Austrians had won almost com- 
plete supremacy during the last years of the Nineteenth 
and the first years of the Twentieth Century. So com- 
plete was the dependence of the Serbs upon their north- 
ern neighbor that they bought from her almost everything 
from scientific instruments to packing cases. Only in their 
purchases of war materiel, to the disgust of the iron-mas- 
ters of Skoda, did they persist in turning to France. 

It was the completeness of their economic mastery over 
their smaller neighbor that made it desirable in Austrian 
eyes that the Serbians should remain cut off from the sea. 
Quite aside from the fact that they themselves coveted the 



The World War: 1914-1918 173 

same seacoast for which the Serbians hoped, was the im- 
portant consideration that the granting of a port to Serbia 
would mean the necessity of sharing profits of Serbian trade 
with the merchants of other nations, who would then be 
able to come in by sea. This trade monopoly was the 
mainspring of Austrian policy towards Serbia, though it 
was complicated by the fear of irredentism among the 
Slavic subjects of the Empire. It explains the interference 
after the Bulgarian victory at Slivnitsa in 1885, the constant 
balking of Serbian struggles to reach the sea, and the evi- 
dent desire to absorb the whole territory of the little state 
if opportunity offered. 

In 1905 the monopolists went a step too far. At that 
time Austria-Hungary was receiving 90 per cent, of the 
Serbian exports, mainly agricultural products, cattle, and 
pigs. Incensed at the negotiation of a commercial treaty 
with Bulgaria by which tariff duties between the two states 
were to be abolished, as well as by the continued Serbian 
orders from the French arsenal at Creusot, the Austrian 
Government refused to renew the commercial treaty which 
was the foundation of Serbian foreign trade. The frontier 
remained closed for more than two years. Serbian ruin, of 
which the more powerful northern neighbor was confi- 
dent, was averted by the combined efforts of the Serbian 
Ministry of Commerce, the Skuptshina (Parliament), and 
the whole people. New outlets were found by way of the 
Danube and the Turkish railway to Salonika. A single 
French business man guaranteed the purchase of 150,000 
pigs a year.^ France, Italy, Belgium, Germany, and Egj^Dt 
began to replace the Austrian market. This was the be- 

^Yves Guyot: Causes and Corisequences of the War, p. 19. There is 
a further discussion of this incident by the same author, "La Question 
d'Orient et les Conflits Economiques," Journal des Economistes, xxxvi: 
178-198, N. '12. 



174 The Economic Causes of Modern War 

ginning of Serbian economic independence, but it was only 
a beginning; and it added to the Austrian determination 
to restore the old dependence. 

Commercial success in the other Balkan states, though 
not approaching the domination which obtained in Serbia, 
had been very great. Although in Bulgaria the seacoast 
made it possible for British commerce to dispute the field, 
the Bulgarians bought from Austria their iron, bags, jew- 
elry, crockery, and similar goods, as well as agricultural 
machinery and war materiel, both important articles of 
trade in the Balkans. Rumania bought machinery and tex- 
tiles, paying for them with the proceeds of her Austrian 
sales of such agricultural products as corn and butter. The 
Montenegrin trade alone failed to reach large proportions, 
principally because the country was too small to make trade 
profitable. 

Important though their own commerce was, the Balkans 
were equally important as the overland route to Asia Minor. 
Austrian policy was directed to keeping the little Sanjak 
of Novi-Bazar in Turkish hands in order that the "BBB," 
running all the way through friendly territory, might open 
the way to increasing trade. The subsequent Serbian seiz- 
ure of this little strip of land made a future war for its re- 
covery almost certain. Austrian exports to Turkey and the 
Near East consisted of manufactured goods, textiles, glass- 
ware, ready-made clothes, fezzes, sugar, woollens, and 
petroleum; and the imports in return were principally to- 
bacco, opium, skins, and maize. The progress of both 
Austrian and Hungarian products was so rapid that in the 
last years before the Balkan Wars their sugar began to 
supplant that from Russia, and the jute trade, which had 
formerly been controlled by Scotch and Indian merchants, 
was also falling into their hands. The sales of Hungarian 
petroleum rivalled those of the Russian wells. Thus Aus- 



The World War: 1914-1918 175 

trian policy in the Balkans clashed with that of Russia, 
and Great Britain, although the political motives of the 
Slavic Power were of more importance than the economic. 

With Italy, the partner of Austria and Germany in the 
Triple Alliance, the clash of interests was more evidently 
economic. The developing Italian industries looked across 
the narrow Adriatic to the Balkans for a part of their mar- 
kets. It was as a base for economic penetration of the 
agricultural lands lying to the east that Italy desired to 
possess the Dalmatian coast, not merely as a site for naval 
bases, which would give supremacy in the Adriatic. In- 
deed, even the desire to make this sea an Italian lake was 
as much economic as strategic in its origin, for such a con- 
summation would have crippled Austrian trade in the Bal- 
kans and the Near East, whilst giving a proportionate ad- 
vantage to Italian trade. Once Italy's power was estab- 
lished along this important strip of territory, railways run- 
ning into the heart of the Balkans would soon be carrying 
the surplus products of her industry. 

It was for similar reasons that Italy desired Trieste and 
as much of Kiistenland as she could obtain. Possession of 
this port would put the Italians in a position to dictate the 
terms of their rival's exports in time of peace, and to cut 
them off entirely in time of war. Possession of either Dal- 
matia or Trieste would go far toward securing commercial 
supremacy. Possession of both by either Power would put 
the other at its mercy. Desire for national union urged 
the Italians on to Trieste. In both Dalmatia and Trieste 
the strategic considerations were of the highest importance; 
but it was economic motives that were paramount. 

What has been true of the lesser wars of the Nineteenth 
and Twentieth Centuries may be seen to be true also of 
this latest and greatest of wars. It was rooted in economic 
causes. The political rivalries, the naval rivalries, the 



176 The Economic Causes of Modern War 

colonial rivalries are only the expression of the underlying 
economic struggle. 

Through the whole web and woof of the diplomacy which 
leads up to the final war, we have the thread of economic 
conflict. Economic questions were perpetually under dis- 
cussion in the diplomatic interchanges of the years before 
the war; and even when the stakes at issue seem entirely 
political or military, they can usually be seen to have an 
economic origin. The statesman who seeks to extend the 
boundaries of a colony to include some especially valuable 
territory, the soldier who demands a strategic position to 
defend that colony, or the sailor who asks for a naval base, 
— all are seeking, consciously or unconsciously, the same 
thing: relief from economic pressure by further expansion. 



CHAPTER V 

THE PREVENTION OF WAR BY INTERNATIONAL FINANCE 

Four things make modern warfare possible: man-power, 
armaments, food, and finance. It is obvious that without 
men, arms, and food, no wars could ever have been waged ; 
and it is equally evident that these three essentials can 
be secured only by the state that can raise the necessary 
money. For soldiers, even though they be conscripts, must 
be paid ; and the food that they eat and the weapons that 
they use, must be bought. In earlier days, because of the 
relatively smaU forces in the field and their relatively un- 
pretentious equipment, the cost of arms was less and the 
financial problem correspondingly simple; but the enor- 
mous cost of war on the vast modem scale makes finance 
of supreme importance. Without money and credit, no 
state can go to war today. So much, at least, is clear. 

The relation of finance to war has never been completely 
understood, and the views upon the question prevailing 
today are, in their extreme forms, widely contradictory. 
Mr. Norman Angell would have us believe that sound busi- 
ness sense, on a profit-and-loss basis, requires the aboli- 
tion of war. Extremists on the other side defend the thesis 
that the malevolent power of greedy bankers, who see in 
war a chance for gain, stands behind the diplomats in every 
outbreak of hostilities. Writers of this school aver that 
international finance has become so powerful that states- 
men are helpless to enter upon a war in the face of oppo- 
sition from the financiers; whereas another group, without 
denying either the power of international financiers or the 

177 



178 The Economic Causes of Modern War 

degree of dependence of one state upon another prevailing 
in the field of international finance, assert that finan- 
ciers and statesmen together may drift helplessly into a 
war which none of them desire, but which they are power- 
less to avoid. 

In spite of the contradictory character of these views, it 
is easy to see that international finance, by virtue merely 
of the enormous complexity of its inter-relations, is of ne- 
cessity a stabilizing influence in the relations between 
states; and that in general its influence — which upon occa- 
sion is tremendous — is likely to be used for the preserva- 
tion of peace, because of the chaos to which war on the 
modern scale necessarily reduces the whole intricate sys- 
tem. 

The extent to which the general staff of a modern army 
considers the money market may be seen in the elaborate 
planning which has been given to the financial support of 
the army prior to most of the modern wars of history. 
Probably the best known example is the German reserve 
of gold which was for years hoarded in the Julius Tower 
at Spandau, and which is believed to have been greatly 
increased in the years preceding the outbreak of the war 
in 1914. This immense gold reserve, which amounted to 
6,000,000 pounds, mostly from the French indemnity after 
the War of 1870, remained at Spandau until 1913, when 
it was transferred to the Reichsbank at Berlin, and de- 
posited there together with 12,000,000 pounds in gold and 
silver, to be kept apart from the commercial reserves of 
the bank and used only in time of war. 

It is certain that the German General Staff had given 
a great deal of thought and study to the financial aspects 
of the Great War. War costs, war loans, and war expenses 
had been carefully taken into consideration, as well as the 
probable effect of a declaration of war upon the money 



The Prevention of War by International Finance 179 

market, at the same time that the problems usually con- 
sidered more strictly military were being worked out. 

This is by far the most elaborate example of financial 
preparation for war, but there are numerous others, as well 
as examples of the disastrous results of failure to provide 
financially, in time of peace, for possible wars. 

Members of Lord Elgin's Commission on the South 
African War expressed the opinion that if the War Ofi&ce 
had had at its disposal the sum of 10,000,000 pounds a few 
months before the outbreak of hostiUties, to be spent with 
the consent of the Cabinet as the only necessary sanction 
(thus avoiding the publicity attendant upon Parliamentary 
action) the preparations that could then have been made 
would have cut down the cost of the war by 100,000,000 
pounds, and might have prevented hostilities entirely. As 
is well known, the declaration of war, when it did come, 
found the British hopelessly unprepared in South Africa and 
with a miserably inadequate force ready to take the field. 

The painstaking quality of the long preparation of the 
Japanese for their war upon Russia in 1904-1905, was shown 
in nothing more characteristically than in the thought and 
foresight that they expended in their financial plans for 
the struggle. The war between Russia and Japan was de- 
termined by economic and financial considerations at every 
step. It is well known that in spite of her military and 
naval successes Japan must have succumbed to Russia in 
the end for lack of funds, had not the disorganized con- 
dition of the larger state forced her to sue for peace while 
the troops of the Mikado were still victorious. Largely 
because the Russian treasury was still unexhausted, whereas 
the Japanese knew their own financial shortage, and be- 
cause the English bankers gave signs of being unwilling to 
make further loans, the victor's plan of making the enemy 
pay by indemnity for the cost of his defeat had to be aban- 



180 The Economic Causes of Modern War 

doned. For financial reasons, Japan did not wish to con- 
tinue the struggle. 

Long before the negotiations with Russia which preceded 
hostilities had reached a critical stage, the Japanese De- 
partment of Finance had elaborated its program. At the 
commencement of the war the Bank of Tokio held a total 
of 11,696,000 pounds, as compared with 105,000,000 pounds 
held by the Bank of Russia and the Imperial Treasury 
combined. Although the cost of the war to the Japanese 
was 200,000,000 pounds, the Bank of Japan still retained 
almost the same reserve as at the beginning of the war, 
10,444,000 pounds, a decrease of only a little more than a 
million after more than a year of war against a larger and 
incomparably a richer foe. During the latter part of May, 
1904, a temporary diminution occurred and the reserve 
reached 6,800,000 pounds; but the government, while mak- 
ing every effort to withdraw as little gold as possible from 
London, kept the reserve of their own bank replenished 
constantly, and made every effort to prevent any possible 
depression of the money market.^ 

Although the Russian preparation for the war had been 
characterized by none of the foresight of the Japanese, the 
value of a large gold reserve in time of war was completely 
demonstrated. Because of the millions of gold Vv^hich they 
held, the Russians were able to borrow as cheaply in France 
and Germany as the Japanese were able to borrow in Eng- 
land. It was the incompetency of the military and naval 
service and the disorganization within the government and 
among the people which defeated Russia. It is probable 
that had the war continued, the advantages of the larger 
reserve would have been more and more convincingly dem- 
onstrated. 

* These figures are derived from an article by Edgar Crammond: 
"Financial Preparation for War," Nineteenth Century: 74:929: N., '13. 



The Prevention of War by International Finance 181 

The importance of finance to military leaders results from 
the necessity of borrowing huge sums for any considerable 
war because of the tremendous costs of modern armaments. 
In the last years of the Great War the expenditures of the 
Allied Powers were so enormous that their own financial re- 
serves were exhausted; and they were forced to turn first 
to Great Britain and then, when even the resources of Lon- 
don, the financial capital of the world, began to fail, to 
the United States, especially after her entrance made Amer- 
ican resources available. In similar fashion, the Central 
Powers were forced to turn to Germany. The vastness of 
modern war expenditures, and the extent to which the richer 
nations were compelled to assist their allies, may be seen 
in the following table: ^ 

Gross Costs Among Active Belligerents 

Gross Advances to Allies Net Cost 

United States $32,080,266,968 $9,455,014,125 $22,625,252,843 

Great Britain 44,029,011,868 8,695,000,000 35,334,000,000 

Rest of Empire ... 4,493,813,072 *** 4,493,813,072 

France 25,812,782,800 1,547,200,000 24,312,782,800 

Russia 22,593,950,000 *** 22,593,950,000 

Italy 12,413,998,000 *** 12,413,998,000 

Other Allies 3,963,867,914 *** 3,963,867,914 

Total $145,387,690,622 $19,697,214,125 $125,690,476,497 

Germany $40,150,000,000 $2,375,000,000 $37,775,000,000 

Austria-Hungary .. 20,622,960,600 *** 20,622,960,600 
Turkey and Bul- 
garia 2,245,200,000 *** 2,245,200,000 

Total 63,018,160,600 2,375,000,000 60,643,160,600 

Grand total ...$208,405,851,222 $22,072,214,125 $186,333,637,097 

The cost of putting in the field a single division has been 
estimated by the General Staff of the United States Army 
as follows: ^ 

*E. L. Bogart: Direct and Indirect Costs of the Great World War, p. 
267. 
"War Department Document No. 527 (W. C. D. 8121-39). 



182 The Economic Causes of Modern War 

One Infantry Division 

Signal supplies $293,751.35 

Quartermaster supplies 3,283,121.37 

Engineer supplies 18,439.67 

Ordnance supplies 4,435,771.20 

Medical supplies 110,059.09 

Total $8,141,142.68 

One Cavalry Division 

Signal supplies $283,456.37 

Quartermaster supplies 4,716,974.81 

Engineer supplies 17,070.77 

Ordnance supplies 3,892,553.94 

Medical supplies 135,145.92 

Total $9,045,201.81 

The cost of war, being so tremendous, will tax the finan- 
cial resources of even the wealthiest nation ; and if the war 
is to continue for any considerable period, the share of in- 
ternational finance in keeping armies in the field will be- 
come so important that the bankers, if they wish, will be 
able to control the duration of hostilities. 
j The astonishing extent to which the modern financial 
world is inter-related and inter-dependent (it is said that 
more than twenty-five per cent, of the world's securities^ 
are held by the bankers of nations other than those of the 
corporations and governments issuing the securities) in it- 
self exerts a natural stabilizing influence upon international 
relations. 

The large amounts of the investments which have been 
placed by European investors in countries other than their 

^"The total foreign investments of the surplus-investing countries of the 
world aggregate between $26,000,000,000 and $29,000,000,000. As the world's 
negotiable securities, according to M. Alfred Neymarck, were, in 1907, ap- 
proximately $111,000,000,000, it will be seen that over 25 per cent, of the 
investments of different nations is in bonds and stocks of the outre-mer 
class." Charles F. Speare: "Foreign Investments of the Nations," North 
American Review: 190-83: Jy., '09. 



The Prevention of War by International Finance 183 

own, is partly due to a desire in certain countries to escape 
taxes on domestic securities; but it is also due to the finan- 
cial necessities of the case. In France, where saving has 
proceeded much faster than expenditure, owing to the na- 
tional thrift, foreign investment is an established policy. 

As German colonial development began soon after the 
Franco-Prussian War, the Germans placed their invest- 
ments in numerous foreign countries, employing the billion 
dollar indemnity as a base of capital supply for their pur- 
pose. The business men of the German Empire carried out 
this policy to a greater degree than those of any other na- 
tion, and sometimes came near recklessness in their willing- 
ness to invest in out-of-the-way corners of the world. Un- 
able to find a sufficient field for investment in their own 
colonies, they were often able to find profitable fields even 
in the colonies of their enemies. Five years before the 
Great War began, the German investments abroad were es- 
timated at $5,000,000,000, and they grew rapidly in the 
years immediately preceding the war. 

The world-wide expanse of British colonies has made it 
possible for a good deal of the Empire's capital to be kept 
under the British flag, and in general this capital has been 
invested only where populations were increasing and the 
purchasing power was growing. This condition is also 
partly a result of the immense amount of exporting done 
by the British and of the fact that London is the centre 
of the world's money market. At the time when the Ger- 
man foreign investments had reached $5,000,000,000, the 
British investors were enjoying an annual income of $500,- 
000,000 from a total of $14,000,000,000 investments 
abroad.^ 

* These and the following figures are in the main derived from an article 
by Charles F. Speare : "Foreign Investments of the Nations," North Amer- 
ican Review: 190:82-92: Jy., '09. 



184 The Economic Causes of Modern War 

The principal British fields of investment may be indi- 
cated about as follows: 

British Investments Abroad 

United States and Canada $5,850,000,000 

Africa 2,675,000,000 

Asia 2,255,000,000 

Australia 1,735,000,000 

Europe (Continental) 1,025,000,000 

South America 750,000,000 

The excess of saving over expenditure which has resulted 
from the characteristic thrift of the French has brought 
to the republic a large share of foreign investment. This 
has not only been a matter of quid pro quo, but an outcome 
of the necessities of the case. The desire to avoid the con- 
stantly increasing taxation on securities held at home, and a 
general feeling that the spread of Socialism might even- 
tually threaten capital invested within the bounds of the 
republic, has also led to foreign investment. 

The widely distributed area in which the $7,000,000,000 
of French foreign investments were placed only a few years 
before the European war broke out, serves to indicate the 
wide distribution of French influence and is one reason 
why the Paris Bourse has always been so easily affected by 
rumors of war. The greater share of French money has 
gone to Russia, because of the cordial relations which have 
existed between the two countries since they came to real- 
ize their common danger from the growing power of the 
German. How very widely these investments are scat- 
tered about the globe may be observed in the following 
table: 

French Investments Abroad 

Russia $1,750,000,000 

Egypt and Suez 600,000,000 

Spain and Cuba 500,000,000 

Austria-Hungary 600,000,000 

Turkey 450,000,000 



The Prevention of War by International Finance 185 

Argentine, Brazil, and Mexico 500,000,000 

Italy 400,000,000 

Great Britain 250,000,000 

Portugal 200,000,000 

U. S. and Canada 350,000,000 

Belgium, Holland and Switzerland 225,000,000 

South Africa 200,000,000 

China, Japan 150,000,000 

Germany 100,000,000 

Sweden, Norway, and Denmark 100,000,000 

Other states 700,000,000 

The investments of the United States have been prin- 
cipally confined to the western hemisphere. Mexico, South 
America, and the West Indies have received the lion's share 
of American capital that has been invested abroad, — not 
so large a proportion of the country's wealth as is the case 
in European countries, because of the large field for in- 
vestment at home, due to the continuing development of 
a country still comparatively new. The few hundred mil- 
lions which American financiers invested in Europe before 
the outbreak of the war gave the balance of financial power 
to the United States, were more than offset by the heavy 
investments of Europeans in this country. 

Money is international in the modem world because in 
all civilized countries the common basis is gold. A credit 
which is based on gold is an international credit; and a 
commerce which is based on money and on credit, there- 
fore ultimately on gold, is international. This common 
bond among the nations is made stronger by the astonish- 
ingly complex system of agencies through which the money, 
credit, and commerce of the world are bound up together. 
The dollar, the pound, the franc, the mark, the ruble, and 
the crown recognize no frontiers. 

Because of the degree of this interdependence, a disturb- 
ance in the peace of the world, no matter where, is certain 



186 The Economic Causes of Modern War 

to be reflected in the Bourses of Europe. The most recent 
example, prior to the Great War, is to be found in the Bal- 
kan disturbances in 1912, when the mere rumors of the 
mobilization of the little Balkan states were sufficient to 
depress the money market in ail the great European powers. 
On the first of October there was a severe panic on the 
Berlin Bourse and another in Vienna, which later extended 
to Paris. London at first stood firm in spite of the severe 
pressure that resulted from the difficulties on the Conti- 
nent, but when Montenegro began hostilities the series of 
panics in Paris, Berlin, and Vienna resulted in a wave of 
selling against which London could not stand, so that on 
Saturday, October 12th, even the English money market 
had to succumb. 

In view of the disastrous results of the minor warfare of 
the Balkans, which was the outcome of the financial inter- 
dependence of the world and also of the tangle of alliances 
and economic rivalries of Europe, the world-wide financial 
confusion which resulted when the Great War broke out 
in 1914 is not surprising. The Balkan scare had left the 
fear of war heavy among European financiers, so that there 
was nearly a panic in Vienna after the murder of the Arch- 
duke Ferdinand, which was only averted because the Mon- 
day following the murder (committed on Sunday) was a 
holiday, giving time to take preventive measures. Between 
July 2nd and 13th there was very heavy selling and a de- 
cline on the 20th. Three days later there was a war panic 
in both Berlin and Paris, with reflexes in London and New 
York. The Vienna exchange had to close the day before 
the Austrian declaration of war on Serbia, and the Mon- 
treal, Toronto, and Madrid exchanges closed the day of the 
declaration (July 28th). On the 29th the Berlin Bourses 
discontinued quotations and the next day the panic had 
reached London and the Bourses were closed in Petrograd 



The Prevention of War by International Finance 187 

and all the South American countries. The London Stock 
Exchange and the New York Stock Exchange had to close 
on July 31st. 

Even though the capacity of international finance for 
preventing wars be doubted, these facts make it evident 
that it is seldom to the advantage of financiers to encour- 
age them. The results are disastrous because of the vast 
and intricate network of international investments and the 
danger which even the prospects of war can create. Finan- 
cial relations, therefore, tend to exert a stabilizing influence 
upon the political relations of the states of the world. In- 
ternational finance has certainly often failed to prevent 
wars; but because of its international character it will or- 
dinarily seek to keep peace unbroken. 

So close are the bonds which unite the nations that an 
eminent British statesman once suggested that in the event 
of hostilities between England and the United States, the 
British might begin their efforts to injure American com- 
merce and finance by burning the warehouses at Liver- 
pool, while the Americans retaliated in similar fashion on 
the warehouses in New York! 

In spite of the writings of a certain school of theorists 
who have tried to make their readers see the financier as a 
sort of Mephistopheles forever at the statesman's elbow 
urging him on to war as a profitable investment, and in 
spite of the undoubted effects of economic rivalry in creat- 
ing war, there is certainly another side to the picture. No 
state in the modern world can wage war without the as- 
sistance of the international financiers. Although financier 
and statesman may be carried together into a war which 
they cannot prevent in spite of the probable wrecking of 
the commercial life of the nation, the weight of the finan- 
cial interests is lilcely to be against war if only because of 
the importance of the money interests at stake. 



188 The Economic Causes of Modern War 

Yet it is quite clear that international finance has had a 
good deal to do with the desires for concessions and spheres 
of influence which have caused so many wars. It is also 
certain that in many cases when a refusal to grant war 
loans to foreign nations would have halted hostilities, the 
financiers have seen the opportunity for a good investment 
in foreign governments' bonds and have not chosen to ex- 
ercise their power. One may imagine the probable predica- 
ment of Japan in 1904 had the English financiers refused 
to float her loans; and there is more than a suspicion that 
the ending of the war came in part because credit was be- 
ginning to fail. 

Before the World War it was thought that the magni- 
tude of the commercial and financial relations between 
England and Germany might prevent a war between the 
two states in spite of the many causes of increasing fric- 
tion. The distinguished English statistician, Edgar Cram- 
mond, could write in November, 1913, less than a year be- 
fore the outbreak of hostilities: ^ 

"London accepting firms lend enormous sums for the purpose 
of financing the trade of Germany, Italy, Austria, and other 
European countries. By means of acceptances, London finances 
one Power alone (Germany) to the extent of about 70,000,000 
pounds at any given moment. This money has been borrowed 
from the EngHsh Joint Stock Banks by the accepting houses, 
and if war should break out, say, between Great Britain and 
Germany, the London accepting firms would be placed in a 
highly dangerous position. They would have made themselves 
liable for the payment to the Joint Stock Banks, within, say, 
three months of the outbreak of war, of the sum of 70,000,000 
pounds against bills drawn on German account. The accepting 
houses could not, of course, pay the whole of this vast sum unless 
they received it in the ordinary course of business from their 

^ Edgar Crammond: "Financial Preparation for War," Nineteenth Ceru- 
tury: 74:939: N., '13. 



The Prevention of War by International Finance 189 

German clients. In the circumstances named, it is more than 
doubtful whether the German clients could or would pay this 
amount and in that event what would be the position of the 
London accepting firms and the English Joint Stock Banks?" 

Three years earlier the same writer had prophesied ex- 
actly what came true ten years after his prophecy ; namely, 
enormous German losses from an unsuccessful war with 
Great Britain : ^ 

"War with Great Britain, if unsuccessful, would involve enor- 
mous losses to the German people. ... A very large amount of 
British capital is employed in financing the trade of the German 
Empire; and the economic ties which bind the two countries are 
of the most intimate character. A rupture of these relations 
would prove disastrous to both countries." 

Read in the light of subsequent events, these passages 
serve to show the over-reliance that was placed upon the 
financial bond. None the less, the effect of this inter-re- 
lation in the world's finances has been felt on the side of 
peace on several occasions. 

Although international finance has failed on numerous 
occasions to prevent war, and has on equally numerous oc- 
casions made no especial effort to prevent it, it has also 
been successful in checking hostilities before they began. 
The preponderant influence of the United States in South 
American countries is not entirely due to the armed might 
of her army and navy; for it is certainly true that the 
enormous investments of American business concerns in 
those countries make for the maintenance of peace, partly 
through the power of finance, and partly because of the 
implied threat of intervention should the holdings of Amer- 
ican capitalists come to harm. The important point for 

^ Edgar Crammond: "Finance in Time of War," Quarterly Review, 
213:323, 0., '10. 



190 The Economic Causes of Modern War 

present purposes, is the fact that international finance in 
the western hemisphere is certainly operating to avoid war. 

The possibility of another aspect of American finance in 
the countries of South America is, however, only too fa- 
miliar. It is well known that American financial interests 
have repeatedly been powerful in urging the intervention 
of the United States in Mexico, at the certain expense of 
a long and bloody war. Other of the more powerful com- 
panies engaged in South American trade have been sus- 
pected both of fomenting revolution and of attempting to 
use naval power to further their own interests once dis- 
order has begun. 

Instances are not lacking in European history of the 
influence of in temational' finance, either in postponing, lim- 
iting, or preventing war altogether. Credits withheld from 
Philip II by the merchants of Genoa, as a result of the 
persuasion of English merchants, at the time when the 
outfitting of the Spanish Armada was in progress, delayed 
the sailing of that formidable fleet for a year, during which 
the English preparations for meeting it had progressed so 
far that it could be defeated. These early international 
financiers, to be sure, did not prevent the war, yet not only 
did they postpone it, but they also shortened its duration 
and directly affected its outcome. 

What could be done three hundred years ago when every 
country was more nearly self-sufficient than any country 
is today, both economically and financially, can be accom- 
plished much more readily and completely at present. The 
coldly commercial motives (without considering others) 
which urge financiers to undertake such action are far more 
powerful, now that the possibilities for the unsettling of 
commerce and finance by war are so greatly increased, and 
now that the destructiveness and costliness of war are so 
much greater. 



The Prevention of War by International Finance 191 

Even in the middle of the Nineteenth Century, Napoleon 
III had to give up his plans to undertake the expulsion of 
the Austrians from Italy, because the mere rumor of the 
proposed campaign caused a panic on the Bourse. Nearly 
half a century afterward the resentment of the French over 
colonial friction with the English in the Sudan and Cen- 
tral Africa was palpably allayed by the rise in value of 
Egyptian bonds, due to the British occupation. The 
French investments in these securities had been very heavy. 
When it is considered that at the time of the Fashoda in- 
cident (1898), public opinion in France would have sup- 
ported a war with England had the internal condition of 
the republic made it possible, but that within six years it 
had been modified sufficiently to permit the Entente Cor- 
diale to be established, the possibilities of international 
finance in the pacification of public opinion and in pre- 
venting war become evident. 

One of the most recent examples of the prevention of 
war by financial influence is the action of the French bank- 
ers at the time of the war scare after the Agadir incident 
in 1911. The precise details of the transactions which went 
on at the time are shrouded in a businesslike reticence, 
but the essentials are sufficiently known to make it pos- 
sible to deduce with accuracy what occurred. 

As the German attitude over Morocco became more and 
more threatening and the prospect of a European war was 
imminent, the French bankers began quietly to withdraw 
their enormous investments in Germany, continuing this 
process until the economic pressure reached such a stage 
that the situation was relieved. So severely were the ef- 
fects of this pacific financial maneuvre felt in Germany 
that many busmess houses were on the point of failure, 
until the Reichsbank came to the rescue. 

The gunboat "Panther" had been sent to Agadir on July 



192 The Economic Causes of Modern War 

1st, initiating a crisis which involved all of political, mili- 
tary, naval, and financial Europe. German industrial en- 
terprises, already heavily in debt to France, and having 
been accustomed to meet their growing needs with further 
borrowing, found themselves by September and October in 
need of 300,000,000 francs, when all French credit was re- 
fused them. They were compelled to turn to the United 
States and to pay from six to seven per cent, for money 
which they might ordinarily have borrowed from French 
banks at three and four per cent.^ 

This example of the characteristic French method of 
meeting a strained situation in international affairs — "rat- 
tling the purse" as opposed to the characteristic tactics of 
the German Empire in "rattling the sabre" — serves to show 
what can be accomplished by a group of able, resolute, and 
patriotic financiers, holding the right investments, at a 
moment of extreme national peril. 

The dual role which international finance plays is shown 
in this incident by the fact that it is also quite probable 
that other financial interests, both French and German, 
may have had a great deal to do with precipitating this 
very crisis for their own ends. Socialists alleged, during 
the progress of the crisis, that a secret understanding ex- 
isted between certain French and German financiers, and 
that the government was allowing itself to be made a cats- 
paw. 

The French, because of their large foreign investments 
(larger, probably than the British, since many of these are 
not strictly foreign but merely colonial) and also because 
a large part of their investments are in the bonds of other 
governments, can exert a gi^eater pressure than most other 
nations. The influence that French finance could exert 
over Russia in the years before the war is evident; and 

^W. M. FuUerton: Problems oj Power, p. 216. 



The Prevention of War by International Finance 193 

there was a similar power of the purse among the Balkan 
nations. 

The nature of this financial power had been illustrated 
before Agadir in the flare-up in the Near East in 1909, 
when the balance of power remained in Paris because of 
the action of the French financiers in demanding peace as 
a quid pro quo for their relief of the prospective belliger- 
ents in their time of financial stress. A journalist com- 
menting on these incidents at the time observed that: 
"France could almost dictate, if she wished, the political 
policies of half a dozen European countries, the bulk of 
whose debt she holds." ^ At the time of the Balkan scare 
of 1912, French loans to Rumania, Bulgaria, and Serbia 
aggregated 1,000,000,000 francs.' 

In the recent friction between China and Japan, the 
Chinese, knowing their military impotence as matters 
stood, have had recourse to economic and financial pres- 
sure. Persisted in unofficially in spite of edicts from Pekin, 
this pressure did succeed in producing a mitigation of the 
rigors of Japanese policy. In South China, where the 
measures were most effective, Japanese imports fell in Oc- 
tober, 1919, to 87,000 yen as against 611,000 yen for the 
same month of the previous year.^ No industrial state can 
withstand such pressure. 

It is clear that international finance, by its mere com- 
plexity, exerts an immense influence in stabilizing the 
relations between nations, and that if circumstances are fa- 
vorable and the financiers involved are willing, it can pre- 
vent war, seeing it has already done so on several occasions. 

Impressed with these undeniable facts, however, numer- 

^ Charles F. Speare: "Foreign Investments of the Nations," North Amer- 
ican Review: 190:92: Jy., '09. 
^ L' Information, January 10, 1913. 
'Charles H. Sherrill: Have We a Far Eastern Policy? p. 265. 



194 The Economic Causes of Modern War 

ous writers have expected too much of the financier. A 
writer in the ardently pacifist New York Independent, com- 
menting on the Agadir affair, wrote :^ 

*'It is becoming every day more clear that the great financial 
interests of the world can 'hold up' war when they once make 
up their minds to do it. We do not overlook the fact that ru- 
mors of war . . . instantly exert a depressing influence upon 
financial operations. . . . 

"What is chiefly needed today is a policy of daring and resolu- 
tion on the part of the leaders of finance, industry, and public 
opinion. . . . The moment that the great financial interests say 
the word, it will become suicidal for any nation, however obsessed 
with notions of its own greatness, to break the peace." 

The very incident upon which this journal was com- 
menting, however, illustrates both of the ways in which 
international finance may be of influence in international 
relations. There is reason enough for believing that finance 
had much to do alike with provoking and allaying this 
crisis. 

It is a more just view to regard international finance 
as either a safeguard or a menace to peace, according to 
circumstance. It is a powerful force, but it is a force that 
is in the hands of its controllers, the bankers, and it may 
make either for peace or for war, as they desire. Invest- 
ments in the bonds of a backward nation, as in the case 
of Egypt, may well lead to hostilities when it becomes im- 
possible for the creditors to collect without the armed as- 
sistance of their governments. 

The view sometimes expressed, that the destruction of 
the financial system of an invaded state would react so 
powerfully upon the aggressor as to ruin his own finances, 
falls to the ground when it is considered that there is no 
real reason why the financial and banking system of an 

^Independent: 71:104-105; Je. 13, '11. 



The Prevention of War by International Finance 195 

invaded state should be at all interfered with by the in- 
vader, who proceeds with his wholly military occupation 
without meddling with finance. 

The belief that the expense of modem wars may deter 
states from entering upon them, must be dismissed or modi- 
fied in view of the evidence of 1914 and of previous his- 
tory which goes to show that monetary difficulties have 
usually been overcome somehow by states which felt war 
necessary. Wars have often cost infinitely more than the 
statesmen who engaged in them expected, but in most 
cases they have been able to find means of struggling 
through to the end. 

Financial difficulties have not always in the past been 
sufficiently a bogey to prevent wars; nor has the influence 
of financiers been invariably cast against war. On the 
other hand, the stabilizing influence of international finan- 
cial relations, and the examples of their prevention of war 
offer evidence of their value in preserving peace. 



CHAPTER VI 

INTERNATIONALISM AND ECONOMIC CONFLICT 

The doctrine of internationalism is peculiarly the prod- 
uct of European civilization and of the Nineteenth and 
Twentieth Centuries. It is an idea which has grown up 
simultaneously with the development of the bitter economic 
conflicts between nations resulting from industrialism, and 
an idea which has derived added force from the appalling 
character of the wars of the period. At no other time in 
history could the idea of the "family of nations" have 
been so thoroughly comprehended, and at no other time 
could the tendency toward a higher unity than that of 
mere nationality have been stronger, than in the Europe 
which has just passed through the greatest and bloodiest 
war ever fought. 

Nations hitherto have been concerned mainly with their 
own development. They have looked on one another either 
as rivals or as possible alhes, to be used in attaining na- 
tional ends and cast aside as soon as they ceased to be 
useful — a theory of international relations which has by 
no means disappeared. The idea of the family of nations 
and of the community of many of their characteristics and 
of their civilization, is a peculiarly modern thing. A sort 
of internationalism existed among the small city states of 
ancient Greece, held together by the common tie of their 
Hellenic blood and meeting at stated periods in what were 
probably the first international events, the Olympic games. 
But the ideas of internationalism, of the community of 

196 



Internationalism and Economic Conflict 197 

interests of the whole world, and of the possibility of a 
world state not based on conquest, have developed only 
within the last century. 

Geographic conditions have nowhere been so favorable 
to the rise of the international spirit as in Europe. In the 
Orient, barriers interposed between the developing civi- 
lizations of China, Japan, and India, so that each could 
in isolation build up its peculiar, self-contained culture, 
seeking nothing from other lands, and feeling the need of 
nothing. On the European continent there were no such 
barriers, no mountain ranges large enough to be insur- 
mountable, and rivers such as the Rhine, Meuse, Scheldt, 
and Danube, whose courses served rather to connect than 
to divide the peoples of the continent. 

Here there grew up a group of nations nearly equal in 
power, no one sufficiently stronger than the others to main- 
tain a long-continued supremacy. During the very period 
in which the suspicions, distrusts, and economic struggles 
whose course has been traced in the preceding chapters, 
were at their height, there was also developing among these 
states another idea. This found expression in the "Con- 
cert of Europe," invoked again and again during the Nine- 
teenth Century in lieu of recourse to arms, for the settle- 
ment of questions of common concern. During the years 
following the downfall of Napoleon, the Concert acted on 
numerous important questions, sometimes in perfect har- 
mony, more often with many differences, but always in 
recognition of the existence of questions in which all the 
Powers had interests and in whose settlement each was en- 
titled to a voice. This unity sprang out of the alliance 
which had been formed to overthrow Napoleon, and it con- 
tinued, though with unanimity somewhat abated, through- 
out the greater part of the century. 

The chief contribution that this principle made to Euro- 



198 The Economic Causes of Modern War 

pean politics was the establishment of the custom of Con- 
gresses at which the diplomats of the various states met 
to discuss and decide upon the issues arising between them. 
At the height of its prestige the Concert occupied almost 
the position of an international tribunal capable of deal- 
ing with all matters which concerned Europe as a whole. 
Its purpose was the maintenance of peace through the 
recognition of the principle that all the states of Europe 
had a vital interest in territorial changes, which should on 
that account be settled by general agreement rather than 
by agreement only between the two Powers immediately 
involved. 

After the Congress of Berlin in 1878, divisions began to 
be formed among the Great Powers, resulting finally in the 
formation of the Triple Alliance and the Triple Entente. 
The "Concert of Europe" had become the ''Balance of 
Power." Two groups of states — the members of each hav- 
ing patched up the economic and political rivalries as best 
they could, and each group having fairly well-defined and 
conflicting economic objects — confronted one another. 
Each protested earnestly its desire for peace; each prepared 
constantly for war. 

The disruptive results of these economic rivalries aJid 
of the Balance of Power in which they were expressed could 
not undo the work that had already been begun. The seed 
of the idea of internationalism had been sowed, and it bore 
fruit continuously throughout the Nineteenth Century in 
various forms of international co-operation for the com- 
mon benefit of all nations. 

In the century between 1814 and the outbreak of the 
World War, sixty-four official conferences were held, in 
which the representatives of from three to fifty states met 
to consider subjects of common international interest vary- 
ing from the control of the African slave trade to the ex- 



Internationalism and Economic Conflict 199 

change of works of art/ In addition to these official con- 
ferences, in which the envoys represented the governments 
of Europe and of the world, there were more than seven 
hundred international conferences, congresses, confedera- 
tions, and alhances, in which the delegates represented pri- 
vate interests only. The subjects for consideration at 
these gatherings included serious social questions, such as 
the control of alcohol and of prostitution, the promotion of 
peace, race hygiene, the suppression of duelling, eugenics, 
juvenile courts, as well as subjects of religious, profes- 
sional, or artistic interest. There were thirty-two religious 
gatherings (which purported to be international in char- 
acter, although at many of them few nations were repre- 
sented) and thirty-seven international conferences for the 
consideration of educational questions. Between 1847 and 
1913 there were nearly two hundred fifty conferences on 
various scientific subjects, including medicine, entomology, 
linguistics, embryology, psychic research, pathology, radiol- 
ogy and the like, holding sessions which varied in number 
from one to twenty-eight. There were almost as many con- 
ferences on economic subjects, among which were included 
congresses to discuss colonial agronomy, metallurgy, agricul- 
ture, railways, marine work, textiles, cattle breeding, 
ceramics, and seed testing. Almost without exception these 
conferences met in European capitals, and the countries 
represented were principally European, although the 
greater part of the world came to be represented, espe- 
cially in those held more recently. 

The increased ease of communication, which was the re- 
sult of the growth of railway, telephone, telegraph, cable, 
and the newspaper, added greatly to the international spirit. 
It accounts for the increased frequency with which the 

^ Exhaustive lists of these conferences are given in the appendix to 
J. C. Faries: The Rise of Internationalism, pp. 181-202, 



200 The Economic Causes of Modern War 

international conferences came to be held, until in the 
year before the Great War broke out, no less than forty- 
one conferences were held in various parts of Europe, in- 
ternational in character and considering a wide variety 
of economic, professional, social, and artistic questions. 

The movement towards internationalism took concrete 
form, too, in the organization of numerous unions, bureaus, 
and conventions for the accomplishment of a number of 
scientific and mercantile purposes which were best to be 
carried out by a number of states acting in co-operation. 
Among the most important of these were the General Post- 
al Union, the Metric Convention, the Central Office of 
International Transport, and the International Union for 
the Publication of Tariffs, each of which had an obvious 
economic significance. 

The General Postal Union was founded at Berne in 
1874, with twenty-one states as members. Four years later 
it was replaced by the Universal Postal Union, meeting at 
Paris; and the convention has since been revised by Con- 
gresses meeting at Lisbon in 1885; Vienna, 1891; Washing- 
ton, 1897; and Rome, 1906. 

Considerations of convenience in view of the growing 
volume of international business relations led to the es- 
tablishment of the Metric Convention in 1875, with rati- 
fications by practically all the Powers of the world, and 
to the erection of the International Bureau of Weights and 
Measures with a central office at Paris, under the control 
of an international committee. 

Convenience in business relations led in 1890 to the 
formation of the Union for the Publication of Tariffs at 
Brussels, maintaining a permanent bureau in the city of 
its origin so that information may readily be obtained as 
to the tariffs of the countries of the world. A more 
strictly European international bureau is the Central Of- 



Internationalism and Economic Conflict 201 

fice of International Transport, a railway union of all the 
continental powers for the purpose of harmonizing their 
rail systems. 

Such international organizations are necessary and are 
possible because of the increasing complexity of the com- 
mercial and financial relations of the world. The modern 
economic system has a side other than the fierce struggle 
sketched in the previous chapters. It is true that con- 
flict between the economic interests of the European na- 
tions, as they have expanded into the far parts of the 
world, has led to constant war, because of fear for the safety 
of food supplies, raw materials, and markets. But this ex- 
pansion of the modern world, with its consequent interde- 
pendence of states, has, it is equally true, led to a growth 
of the international spirit. 

The same economic forces that have led to constant war 
in all quarters of the earth are, through the complexity of 
organization which they involve, fostering the international 
spirit. International trade cannot go on without inter- 
national co-operation. 

Modern industrialism tends to create internationalism in 
some measure, simply because it has grown to such an ex- 
tent that its trade necessarily oversteps frontiers. The 
type of internationalism produced by our present indus- 
trial and economic system is so far from ideal that we 
seldom think of it as being international at all. It is dif- 
ferent from the ideal and wholly Utopian world state that 
is usually associated with the word "internationalism," that 
we fail to recognize it. Utopia is only an extreme of in- 
ternationalism, however, and internationalism may exist 
without extremes. 

Although, when contrasted with the international ideal, 
the condition of the world since 1878 — ^with its wars, its bit- 
ter commercial rivalries, its quarrels over colonies and 



202 The Economic Causes of Modern War 

spheres of influence — appears a chaos, one has but to con- 
trast it with an extreme nationalism to see that a very- 
real and fairly extensive degree of internationalism has 
actually existed for a long time. The self-sufficing nation 
— whether economically or culturally — no longer exists. If 
we contrast the Europe of 1840 with the exclusively na- 
tionalistic Japan of the same date, the degree to which 
internationalism had even then grown up is at once ap- 
parent. 

Internationalism has been a very real thing in the worlds 
of science, art, and literature for a long time. Trade be- 
tween the nations and the necessity for external markets 
and external sources of food and raw materials have grown 
so largely within the last half century that commerce has 
become international. Business and industry have ignored 
frontiers to an extent never approached before in the his- 
tory of the world. 

The political interweaving of the world by military force 
is an old story. The absolute dependence of the various 
countries of the present world through finance and com- 
merce^ — so complete that every state is influenced imme- 
diately and obviously by the economic conditions prevail- 
ing in other states — is a new story. This condition has come 
about through the rise of industrialism, with the conse- 
quent necessity of expansion into all parts of the globe. 
Commerce has become an international agency and the 
business men and financiers of the various nations begin 
to find frontiers rather a hindrance than a help. Even 
French and German financiers have ventured to co-oper- 
ate in Morocco. 

It is because of this fact that the tendency has begun 
to standardize so far as possible the commercial conven- 
iences of the whole world. Here is to be found the origin 
of railroad agreements, international tariff agencies, inter- 



Internationalism and Economic Conflict 203 

national rates of exchange, international units of measure, 
and the rest of the means of co-operation between individ- 
uals of different states and the states themselves. It is 
not without significance that the American decimal mone- 
tary system was taken over in toto by the Canadians, in 
preference to the more complicated English system. A 
century ago there would have been no need for an inter- 
national coinage comparable to the need today, nor for 
the publication of international tariffs and an international 
system of weights and measures. International trade, in- 
deed, existed, but the industrial life of most of the states 
of Europe did not then depend upon it, nor could the pre- 
vention of importation or exportation cause widespread suf- 
fering among the people of a whole nation, as it can today. 
An apparent exception to this is to be found in the con- 
dition of the British Isles, which would even then have 
suffered from lack of food. But even here the alteration 
which the modern industrial changes and the consequent in- 
ternational dependence have brought about is very marked. 
The Hevolution in America could cause little industrial 
unsettlement in England in 1776, even though imports 
from the colonies were interfered with. The American 
Civil War, less than a century later — the inter-relation of 
precisely the same territories — could cause so much British 
suffering as to provoke the thought of intervention, a re- 
sult of the growing complexity of the world's economic sys- 
tem, and the growing interdependence among nations. 

At first thought it seems that such a state of affairs — 
in which the interests of the nations are continually be- 
coming more and more closely united and in which the 
frontiers are an annoyance if not a hindrance to the busi- 
ness men who are the dominant powers in the life of most 
industrial states — would automatically produce Utopia 



204 The Economic Causes of Modern War 

overnight. If the nations of the world are so inter-united 
that they cannot get along without one another, we might 
well expect to wake up some morning to find that by a 
gradual progress of world evolution they have merged into 
one, and that the federation of the world has arrived in 
the guise of an economic necessity. 

How far this is from being the actual case, the con- 
tinuing wars, whose genesis can be so easily traced to eco- 
nomic causes, suffice to show. Neither the tendency toward 
internationalism arising from economic conditions, nor the 
tendency toward wars arising from the same source, can be 
denied. Contradictory though they are, they co-exist; and 
they are both the outcome of the same cause: the pres- 
sure of population, out of which grows industrialism. An 
industrial state of society means an enormously complex 
dependence of civilized nations on one another and on un- 
developed territory. Such interdependence means both 
co-operation and conflict. A strange pair of twins from 
the same mother — internationalism and war. 

Both are the results of the economic system of the day. 
From it internationalism arises because of the necessity for 
commercial relations with other states and their dependen- 
cies, and from the community of interests which is thus 
brought about. From it economic rivalry, with its result- 
ant wars, arises because of the clash of interests between 
industrial Powers contesting for markets, raw materials, 
and food. 

Examples of the co-existence of co-operation and conflict 
are frequent enough in recent history. Germany and 
France were political and economic rivals in many spheres. 
The hostility existing between them — it had been an ad- 
mitted fact of world politics for years — would in the end 
lead to hostilities. In Africa, in the Far East, in Alsace 
and Lorraine, in the frontier restrictions on imports and 



Internationalism and Economic Conflict 205 

exports, economic rivalry produced a sharp clash of inter- 
ests. German industry grew and flourished on the iron de- 
posits taken from the correspondingly crippled French in- 
dustry. The economic hostility between the two was clear 
enough and its share in producing war has been amply 
demonstrated. 

At the same time that this rivalry was growing up, how- 
ever, there was also growing up between them a com- 
munity of interests which arose out of their commercial 
relations. Since Germany and France, despite their dif- 
ferences, had to trade with one another, the Metric Con- 
vention, — an international measure and a step, however 
slight, — to the breaking down of national barriers, had to 
be adopted because it was a convenience for commerce. 
One cannot imagine a pair of isolated states such as China 
and Japan in 1840 finding necessity for such a convention, 
because no international trade relations of any considerable 
extent existed. Similarly, the tariff publications, the agree- 
ments with regard to cables, wireless, mails, railways, — 
all measures tending to bring the nations of the world 
closer and closer together — have grown out of the inter- 
nationalism of trade resulting from the very industrialism 
which wa%s breeding simultaneously the wars that tore the 
nations apart. 

The situation is a paradox on a world-wide scale. 

Bitter as was the Anglo-German struggle in the years 
before 1914, there was real co-operation. Admitted fact 
as the rivalry between English and German trade has been 
for years, economic links bound the two nations so strongly 
that a portion of the British public neither felt nor under- 
stood the menace of Germany. While one division of Brit- 
ish sentiment was opposing the passage of a protective 
tariff, another was demanding it to safeguard British in- 
dustry from German "dumping." While half of Britain 



206 The Economic Causes of Modern War 

could not sleep o' nights for fear of German dreadnaughts, 
the other half was peacefully consuming the very goods 
which those dreadnaughts were built to protect in transit. 
For German "dumping" would never have been possible 
had British citizens refused to buy. That they did not 
refuse to buy is best shown by the results of the British 
and French laws requiring the "Made in Germany" stamp 
on all German goods. Intended to check German trade 
by warning the consumer that he was not patronizing home 
industries, the stamp became instead the best advertise- 
ment of the German manufacturers. Industrialism was 
producing a world-wide contradiction. It was creating in- 
ternationalism and international war at the same time. 

One other illustration of this paradox is to be seen in 
the organization of the working class. The rise of indus- 
trialism has produced simultaneously an incentive to a new 
type of internationalism and an incentive to a new type of 
war. International organization of the workers has roused 
both a class consciousness that ignores frontiers, and the 
advocacy of a war between classes. The Internationale, 
created by an industrial proletariat, has gone a long way 
since the days of Karl Marx, Friedrich Engels, and the 
Communist Manifesto, with its plea, "Workers of the 
world, unite." 

The workers of the world have united, or at least they 
are uniting; and they are developing among themselves the 
"international mind." Thoroughly devoted to the princi- 
ple that at the root of all wars lie the interests of the capi- 
talists of the various countries (a class which they regard 
as leagued in an international community of interests), 
the leaders of the radical wing of labor before the war 
sought their own union in the Internationale which, with 
its headquarters at Brussels, had been organized and active 
for more than half a century. 



Internationalism and Economic Conflict 207 

International finance and international working-class or- 
ganization are two conflicting forces to which nationality 
is coming to mean less and less. They both make for in- 
ternational solidarity. But finance may stimulate (as well 
as prevent) wars between states; and the leaders of the 
Internationale have not hesitated to preach another kind 
of war — not between states, but between classes. The at- 
tempt of German and French socialists to stop the war in 
1914, failure though it was, has an enormous future sig- 
nificance. 

The interest of the wage-earner in internationalist or- 
ganization is very large. From the workers come the rank 
and file of armies, who endure a maximum of the misery 
and enjoy a minimum of the glory and profit of war. Only 
through the indirect and not always apparent channel of 
extension of the national industry, does the worker profit, 
if he profits at all, from the wars of economic rivalry. 
Hence the growth of the international movement among 
the working classes in recent years; and hence the efforts 
of French and German socialists to prevent the outbreak of 
the World War — an effort which is pregnant with future 
possibilities. 

That the tendency toward international solidarity which 
economic and financial inter-relationship and the scien- 
tific and artistic community of tastes and interests through- 
out the world produces, has not prevented wars; and that 
international economic rivalry has been productive of so 
many wars, suggests a comparison of economic rivalry be- 
tween states, with economic rivalry within the state itself. 
Why have most individual nations developed to the point 
where their cohesive forces are sufficient to prevent civil 
war? Why has internationalism never developed to the 



208 The Economic Causes of Modern War 

place where it can accomplish the same thing in interna- 
tional relations? 

In any state, internal commercial rivalries exist which 
are analogous to the larger economic conflicts of the world 
powers. In the larger political organisms of the world, 
in states like the British Empire or even the United States, 
internal economic rivalries may exist to a very consider- 
able degree. The tariff laws of the British dominions or 
the tariff wars that raged among the American states prior 
to the formation of the Union, are sufl&cient demonstra- 
tion of the fact. Sometimes, as in the United States, un- 
derlying economic causes may lead to civil war; but these 
cases are rare in the modern world. There are not many 
civil wars, whereas since 1878 there have been only four 
years when the world was wholly free from international 
struggle. Why do international economic rivalries lead to 
war, in spite of the strong international solidarity that has 
gradually grown up in Europe and the world at large, 
whilst only occasionally do economic difficulties within na- 
tions lead to civil war? 

The answer is to be found in the tradition, of very re- 
cent origin, sanctioning the intervention of diplomats, sup- 
ported by the armed power of their states, in the economic 
interests of their nationals. The commercial attache, that 
curious link between the consular and diplomatic services, 
is a newcomer in the embassies. Commercial rivalry has 
not been left upon an entirely economic basis; but political 
power has been thrown into the scale to help the economic 
interests of the fatherland where competition was prov- 
ing too much for its merchants. Within states there is no 
such governmental effort to secure "special interests" and 
"legitimate aspirations." Massachusetts does not seek to 
assure supply of raw materials to her textile mills by 



Internationalism and Economic Conflict 209 

threatening to use her militia to secure an exclusive "sphere 
of influence" in the cotton fields of Georgia. 

Not only has trade followed the flag; but on a good 
many occasions the flag has gone post-haste to the rescue 
when trade has found itself in difficulty. Great Britain had 
forty per cent, of the trade of Morocco; France had twenty; 
Germany had nine; — the Kaiser sent a gunboat. The Turks 
in Tripoli hampered Italian commercial penetration — the 
Italians seized Tripoli. The extension of Russian, Ger- 
man, French, and British commercial interests in China 
was not left to the individual enterprise of the merchants 
themselves. Spheres of influence were demanded, and gov- 
ernmental assistance was granted them. 

The intervention in Egypt was largely a matter of help- 
ing out European investors who had made a bad bargain. 
If the same investors had bought wild-cat mining stock in 
the United States there would have been no intervention, 
any more than there was intervention when the Volstead 
Act rendered valueless the very considerable European 
holdings of stock in American brewing companies. But 
when the Khedive's creditors lost, after having loaned to a 
backward and notoriously unbusinesslike native adminis- 
tration, they appealed to their governments. 

Protection of nationals whose properties are threatened 
by disorder in the backward states in which they have in- 
vested (the sort of thing that the United States has re- 
peatedly done in the smaller countries of South America) 
is much the same. Intervention of this kind, ostensibly 
necessary, has led often in the past to attempts at per- 
manent occupation, which rouse the jealousy of other 
Powers, economic rivals of the occupying Power, and lead 
on to eventual hostilities. 

There is good reason for questioning the ultimate value 
of such interference by governments. Certainly the peace 



210 The Economic Causes of Modern War 

of the world would have been served if the financiers of 
European countries had been given to understand long 
since that their bad investments would not be recouped 
by their countries' armies and navies. It remains to be 
shown that economic progress would not have gone on at 
the same rate if the merchants who aspired to trade con- 
cessions in undeveloped quarters of the globe had been per- 
mitted to take their own risks and win their own profits 
or losses in free competition with their natural rivals from 
other states, without placing themselves under the pro- 
tection of their governments. 

Perhaps the development of such backward lands as 
China or of savage lands like the African territories, might 
not have proceeded under these conditions. There might, 
indeed, have been anti-foreign risings which would have 
led to massacres so appalling that armed intervention would 
have been necessary. The observed historic fact remains 
that where native risings have occurred (the Boxer Re- 
bellion is a standing example) they have been caused by 
the intolerable demands of foreign states and not by the 
mere presence of foreign merchants. 

Japan, it is true, was opened to the western world by 
force; but it is a noteworthy fact that Japan, having by 
force been able to defend her national integrity, has made 
more progress, economic, social, political, and intellectual, 
than any of the districts of the world which have been 
farmed out as "concessions" or "spheres of influence." 

There is no denying that where economic rivalry has 
been inimical to the spirit of internationalism, that condi- 
tion has usually arisen through the rivalries of governments 
over economic questions rather than through the rivalries 
of individual merchants or corporations unassisted. 

The trade rivalries of Germany and England on the Con- 
tinent and in their interchange of products, it is also true, 



Internationalism and Economic Conflict 211 

contributed to war; but they were only a small part of the 
causation of the war and they stirred up ill-feeling only 
in portions of both populations. German aggression in 
Africa, China, the Balkans — the result of political and dip- 
lomatic exertions on behalf of German merchants and in- 
dustries — stirred the whole British public. The commer- 
cial rivalries of Germany and France on the Continent had 
little governmental recognition, and they led to compara- 
tively little iU-feeling. The Moroccan difficulties stirred 
the whole populations of both states. 

If political interference in economic conflicts could be 
prevented or limited, the checking of internationalism 
would be correspondingly prevented or limited; and the 
natural trend to solidarity between the nations because of 
their growing economic ties, ready communication, and 
their intellectual and artistic community, would be given 
freer play for the binding together of all peoples. 



CHAPTER VII 

THE LEAGUE OF NATIONS 

The principal economic cause of war is the interde- 
pendence of nations without guarantee of security save by 
their own armed strength. Ahnost every state in the mod- 
ern world is completely dependent upon other states or 
upon colonies overseas for some commodity which is ab- 
solutely essential for its life, yet which may be cut off at 
any time by military or naval reverses in the event of war. 

Every nation in Europe, as we have seen, must look out- 
side its own boundaries for a large proportion of its food 
supply, for its markets, and for the raw materials with- 
out which its industries cease and its population starves. 
Germany and England look to the United States for cot- 
ton. Both states look abroad for large parts of their sup- 
plies of other raw materials. France imports huge quan- 
tities; and the absolute dependence of small manufactur- 
ing states like Belgium is abject. 

The food situation has been much the same in all Euro- 
pean states. The United Kingdom had for a hundred 
years been only a few weeks ahead of starvation, hopelessly 
and helplessly dependent upon the ships which from the 
ultimate ends of the earth bring in her foodstuffs. Be- 
fore the war Germany had to import 16 per cent, of her 
grain consumption and the importations of the smaller 
states were proportionately much larger. The Swiss nor- 
mally imported 78 per cent, of their grain, the Dutch 66 
per cent., the Norwegians 65 per cent., the Danes 28 per 
cent, and the Swedes 14 per cent. Even the rich soil of 

212 



The League of Nations 213 

Spain was insufficient to meet the needs of the people.^ 
Any state with military or naval power sufficient to cut the 
trade routes may starve its neighbors at will. 

That modern states should be dependent upon the whims 
of their neighbors for the prosperity and happiness, even 
for the safety of their citizens, is an intolerable condition, 
which none the less existed at the outbreak of the World 
War in every European nation, and which exists today. 

Instances are not far to seek. The Austrian attempt to 
ruin the farmers of Serbia by closing the frontier to their 
pigs, is a single grotesque but striking example.- The 
misery caused among the textile workers of England when 
the American Civil War cut off the cotton supply and 
forced the closing of the mills, is another; and in this 
case the economic pressure became so severe that it very 
nearly led to British intervention on behalf of the South- 
ern States. 

The subsequent British attempt to encourage cotton 
growing within the imperial dominions is a striking ex- 
ample of the effort of a state which finds its dependence 
on other nations too dangerous to be endured, to become 
economically self-sufficing. The seriousness with which the 
British recognized the menace to their textile industry of 
its reliance upon American cotton, is to be seen in the 
speech from the throne of Edward VII, February 2, 1904. 
The King said: 

"The insufficiency of the raw materials upon which the great 
cotton industry of this country depends, has inspired me with 
great concern. I trust that the efforts which are being made 
in various parts of my Empire to increase the area under culti- 
vation may be attended with a large measure of success." 

^ Sir George Paish : A Permanent League of Nations, pp. 62 and 75. 
==868 p. 173. 



214 The Economic Causes of Modern War 

The efforts to remedy the dependent condition of the 
cotton industry have been successful to the extent of in- 
creasing the proportion of the cotton used by English tex- 
tile mills grown within the borders of the Empire to a very 
considerable extent; but still 11,000,000 of the 16,000,000 
bales of cotton consumed annually come from the United 
States/ The degree of dependence upon the United States 
is still disquieting, and only the navy provides a security 
which in these days of invention and in view of the prob- 
able future development of the use of aircraft in war, is 
more tenuous than a naval power cares to admit. 

Other examples might be multiplied without end. Per- 
haps the most striking evidence of the interdependence of 
nations anu tne imperative necessity of providing security 
of some kind, may be seen in the suffering caused in the 
South in 1914 when the war prevented the export of 
American cotton to the German market, enabling the 
British to buy what they needed at depressed prices, with 
results very similar to those in England during the Civil 
War. As Englishmen had suffered in one great war be- 
cause they could not buy cotton, so Americans suffered in 
another and a greater because they could not sell it. As 
England had then proposed to resort to force, so now Gov- 
ernor Colquitt, of Texas, in a fiery outburst, proposed send- 
ing "American ironclads to England's door," to enforce the 
rights of the cotton-growers of the United States. 

In all these instances the situation is the same. Nations 
are vitally interwoven, one with the other. Almost any 
state can strike directly at the economic interests of any 
other — interests so important that serious interference with 
them produces nation-wide calamity. No agency exists 
to guarantee security against these occurrences at any 
time; and the nations of the world, unwilling to endure so 

^J. Arthur Hutton: The Cotton Crisis, p. 12. 



The League of Nations 215 

perilous a condition, resort to armaments to provide, by 
their own individual strength, such security as is possible. 
At the same time, they seek to acquire undeveloped terri- 
tory to supply their needs; and in their efforts come into 
conflict. The train of miseries that the World War brought 
with it shows how little this method avails. 

Interdependence is not in itself a cause of conflict. It is, 
on the contrary, as has been shown in the preceding chapter, 
the true cause for much of the progress already made in 
international co-operation. If the insecurity of the supply 
of commodities necessary to an industrial state can be 
removed, the interdependence of the states is the best pos- 
sible link to bind them together. But security is indispen- 
sable. How is security to be assured, and the economic in- 
terdependence necessary to a complex civilization left to 
proceed naturally, becoming in the end a device for the 
preservation of peace? 

It must be remembered in the first place that economic 
rivalry need not lead to the tjq^e of political rivalry which 
has found expression in the colonization and quarrels of 
the last fifty years. Except for the desire to keep its citi- 
zens under its own flag, a state has no need for seeking 
colonies, providing that the steady inflow of raw materials 
and food, and the permanent accessibility of markets are 
assured. 

But if free exports and imports are not assured, an indus- 
trial state must, under the pressure of an iron necessity, 
seek to obtain colonies and strategic possessions on sea lanes 
and trade routes by land, in order to provide for its own 
safety. But granted this freedom of importation and ex- 
portation, the chain of war-causes — over-population, pro- 
duction beyond the capacity of the domestic market, food 
shortage, and lack of raw materials — which has been almost 
inevitable in modern Europe, ceases to be a danger. The 



216 The Economic Causes of Modern War 

fear of excessive production ends when free access — not to 
the home markets of competing industrial states, perhaps — 
but to the colonial markets of the world, is offered to the 
merchants of every nation, subject to no restriction save 
their own commercial capacity and skill. The danger of 
food shortage, similarly, vanishes when the highways of the 
world are kept open by a power capable of crushing any 
single nation that ventures to interfere with their freedom. 
The lack of raw materials ceases to be a menace for the same 
reason and under the same conditions. 

A fact which must be kept in mind always is that the 
wars which have broken out as a result of economic rivalry, 
have arisen from competition for trade or colonies or conces- 
sions in the politically backward portions of the earth. 
Germany and England met in competition in European as 
well as in colonial markets, and (although it is admitted 
that this rivalry contributed to ill feeling and helped cause 
hostilities) it is quite evident that it was not this purely 
trade competition (unaided by diplomacy or naval and 
military demonstrations) that produced the war. The 
kind of economic rivalry which menaces peace is that 
which grows up as the nations compete with one another 
in the more remote or undeveloped comers of the earth, 
railways in Asia Minor, lumber on the Yalu, the fertile 
Yangtse valley, Egypt, Morocco, and the Balkans. 

Except for iron and coal, Europe in general looks to these 
undeveloped countries for all its raw materials and food. 
European Powers are not very fearful of possible hindrance 
to export or import among themselves; for, large as these 
exchanges may be in bulk and important as they may be 
jSnancially, they are not so important to livelihood as are 
the raw materials and the food brought from the far-off, 
unprogressive lands, where the war that halted European 
progress was bred. 



The League of Nations 217 

If a condition could be brought about throughout the 
globe in which industry were at all times certain of free 
access to supplies of the all-important raw materials and 
at the same time assured of adequate markets, most inter- 
national friction would disappear. Such a condition does 
not demand the adoption of universal free trade by any 
means, but it does require the elimination of protective 
tariffs except for the development of home industries, and 
the total abolition of exclusive colonial tariffs/ General 
concession of most favored nation treatment in colonies 
is essential. 

Suppose that an organization had existed during the 
last fifty years sufficiently powerful to provide Great Britain, 
Germany, France, Japan, and Russia with trustworthy 

^ It is by no means demonstrated, of course, that free trade (to which 
Cobden referred as "the best human means for ensuring real and enduring 
peace") would actually do all that has been claimed for it. At the same 
time, it would certainly lead to an enormous reduction of the rivalry and 
friction from which war grows, if applied to colonies. From two sources 
so widely removed from one another as Lord Cromer and the Fabian 
Society, I take the following opinions: 

"No experience has, therefore, as yet been acquired, which woidd en- 
able a matured judgment to be formed as to the extent to which Free 
Trade may be regarded as a preventive to war. . . . All that has 
been proved is that numerous wars have taken place during a period of 
history when Protection was the rule and Free Trade the exception; 
though the post hoc ergo propter hoc fallacy would, of course, be involved, 
if on that accoimt it were inferred that the protection of national indus- 
tries has necessarily been the chief cause of war. . . . 

"Whereas exclusive trade tends to exacerbate international relations. 
Free Trade, by mutually enlisting a number of influential material in- 
terests in the cause of peace, tends to ameliorate those relations, and 
thus, pro tanto, to diminish the probability of war." — E. B. Cromer: 
"Free Trade in Relation to Peace and War," The Nineteenth Century and 
After: 68:384-87, S., '10. 

With especial reference to colonial questions, Mr. L. S. Woolf sums this 
attitude up succinctly: "With free access to the flags of all nations, 
with complete liberty of commerce, with no concessions of commercial 
monopolies and privileges, we should hear less of Far Eastern Questions, 
of the partition of China of Persia and Bagdad and Morocco." L. S. 
Woolf, International Government, p. 28. 



218 The Economic Causes of Modern War 

guarantee of a steady supply of the raw materials that their 
industries required, of sufficient food for their populations, 
and of access, with free competition, to the markets of all 
colonies, with sea lanes and land routes permanently open, 
unhampered by diplomatic or political interference, or 
force of any kind. 

Even such a guarantee might not have eliminated some 
points of international friction. There is no reason to 
doubt that the successful exploits of the German in "dump- 
ing" would have led to resentment. But all over the world 
there would have been a lessening in tension in the inter- 
national situation because of the absence of the fear and sus- 
picion produced by years of colonial rivalry and reinforced 
by incident after incident, year after year, until the nations 
were ready for war upon trifling provocation because of 
rivalries whose economic origin the popular mind had all 
but forgotten. 

Given guarantees of raw materials, food supplies, and 
open markets, the world might have been spared the whole 
sorry business in the Far East. The policy of the open door 
would have obtained, and neither Russia nor Japan would 
have needed hegemony in the miUtary or naval sphere in 
order that her merchants might carry on trade. In the 
Near East, with the security of the trade routes and sea 
lanes already guaranteed, the fear of the British for India 
would have disappeared, and with it a century of struggle. 
The suspicions of the other nations would have decreased; 
and at least the political results of their economic rivalry 
in Asia Minor would have ceased. The contest for the 
market which followed would have been merely a struggle 
between business men, without diplomatic interference, of 
the sort that goes on within all states among native mer- 
chants. 

Guarantees of trade routes would have done away with 



The League of Nations 219 

half the danger of the Bagdad Railway, from either military 
or economic reasons, and the projected road might have 
become a business enterprise of great value to all the 
nations. 

In the Balkans, guarantees of access to the sea would 
have reduced friction and altered the situation entirely. 
The friction in Persia and Morocco would have disappeared, 
as would also the scramble for naval bases, for the protec- 
tion of sea-borne commerce would no longer devolve upon 
the various states, since the security of the sea lanes would 
be certain. 

It must be remembered that in international politics 
the starkly economic motive is likely to be glossed over 
with finer-sounding phrases. A large proportion of the 
international crises, therefore, in which the "national hon- 
or has been affronted, or the "legitimate aspirations" 
thwarted, are at bottom economic, and the conflicts which 
result are really disguised economic rivalries. Most of the 
wars and threats of war which arise ostensibly as the results 
of causes other than the economic, are actually of such ori- 
gin that they vanish once economic security is permanently 
won. 

The interdependence of the nations of the world has 
become a commonplace; but obvious as this fact is, its 
equally important corollary is likely to escape attention. 
Unless guarantees can be provided for every nation, that 
nothing save its own ill-doing will interfere with the free 
flow of supplies upon which its very life depends, the states 
will continue to plot to provide this security for them- 
selves, and the rivalry thus engendered over the portions 
of the earth unoccupied by civilized peoples will lead 
always to arbitration by artillery. 

The narrow margin of failure of the German submarine 



220 The Economic Causes of Modern War 

campaign against England indicates still more. It shows 
that even a powerful Empire (which has a partial economic 
independence of the rest of the world) is still far from com- 
plete security. For though it can withdraw with measurable 
success from dependence on the rest of the world, it must 
suffer as bitterly as any other if its enemies are able to 
interfere with its lines of transport. 

Recent developments of aerial warfare teach that in 
the future such interference with railway communication 
will probably become as easy a matter, even in uninvaded 
country, as interference has hitherto been by sea. The 
bare degree of security that has existed by virtue of the 
might of individual nations is still further diminished, and 
the problem of providing a sufiScient guarantee of economic 
security to all nations is further complicated. 

The existing order of international interdependence with- 
out security means nervousness among statesmen, bitter 
economic hostility, out of which come distrust, fear, sus- 
picion, the scramble for colonies, and spheres of influence, 
and the whole miserable business that breeds war. So 
long as nations are dependent one upon another and yet are 
not secure in that inevitable relation, war will continue. 

It is clear that interdependence, even if it could be 
reduced, can never be done away with so far as such raw 
materials as minerals, lumber, wool, cotton, and the like, 
or so far as food supplies are concerned. The alternatives 
are : either to become reconciled to the continuance of wars, 
growing more and more destructive and wasteful as science 
advances; or else to provide an agency capable of offering 
security — at least such an approximation that the nations 
may reasonably yield it a fair degree of reliance. 

The peace problem, as the destructiveness of war in- 
creases, is rapidly becoming something more than a mere 
question of ameliorating the lot of the race. It is a prob- 



The League of Nations 221 

lem of racial survival. The wars of the last hundred years 
have been deadly, destructive, and wasteful enough ; but the 
World War involved the whole race. There is prospect 
of the future application to warfare of still more efl&cient 
aircraft, of new chemical devices, and of the possibility of 
spreading disease among armies and civilian populations 
by means of bacteria. The continuance of wars and the 
continuance of the race are incompatible. Either we must 
find a way to stop killing each other, or there will speedily 
be none of us left to kill. 

In other words, it is imperative that a mechanism of 
some kind be devised for assuring to every nation which is 
in any vital respect dependent on another or on colonies, 
that the freedom of import and export will never be denied 
it. Such a step would put an end to economic rivalry be- 
tween states, and leave merely the legitimate competition 
of individual business men. 

If there is to be a League of Nations, it must have an 
extended economic program and the force to assure that 
it will be respected. If we are not to have a political 
League of Nations, at least there must be a board of inter- 
national economic control of some sort which will do away 
with the economic conflict of the sort that the last fifty 
years have seen. The world is now an economic unit with 
interests of which no part can be considered separately 
from any other; and all the logic of history and evolution 
points to a closer and closer interweaving of these interests. 
Economics long ago overstepped political frontiers. 

The whole problem of economic rivalry and the wars that 
it produces is solved when security is assured to interde- 
pendent nations. 

It is evident that none of the expedients hitherto 
attempted have in any sense solved this difficulty. Neither 



222 The Economic Causes oj Modern War 

the Concert of Europe nor the Balance of Power has 
availed to prevent war after war, in each of which the 
economic motive has appeared, caused by the inequitable 
conditions which lead the business man in the end to turn 
to the diplomat and the soldier for aid in carrying out his 
purposes. Only an international organization of some sort, 
a very powerful organization, can provide such security as 
has been indicated in the preceding paragraphs. One 
thinks naturally of the League of Nations, even though the 
Covenant which establishes it has not stressed greatly the 
economic problems that the future international relations 
will involve. The League is the only agency capable of 
a task so gigantic. If it is to exist at all, no other organ- 
ization can attempt to render this service, for the co- 
existence of a power sufficient to guarantee economic se- 
curity would menace the League itself. 

The practicability of such an international economic 
union as is postulated in proposals for free access to all 
parts of the colonial world, for guarantee of food supplies, 
for raw materials, and open colonial market, has already 
been tested in practice on a scale almost as large as that 
proposed. Not all the nations of the world, it is true, were 
in the economic union of the Allies, but certainly fairly 
safe deductions can be made from a co-operation which 
involved Great Britain, the United States, France, Italy, 
Japan, and the smaller Allied Powers. When the United 
States entered the war, the economic system that had been 
begun by the Allies reached a culmination such as had never 
been dreamed of. Embracing two hemispheres and most 
of the nations of the globe, it was more powerful than any 
similar organization that had ever existed or been imagined. 
Food, war materiel, the raw materials of industry, trans- 
portation — all came under the control of this gigantic eco- 
nomic union. 



The League of Nations 223 

The economic co-operation of the Allied Powers amounted 
to an inter-continental administration which held dominion 
over almost all the commerce of the world, drawing its sup- 
phes, not merely for military purposes, but for the supply of 
industry and the food of the civil population, from every 
quarter of the globe. Nothing like it had ever been seen 
before. Nothing quite like it had ever been imagined. 
But there it was, and during the last part of the war it did 
its work in a fashion that, while battles were still being 
fought, pointed the way to their prevention in the future. 

The economic union which had such an enormous sig- 
nificance was a development of the first tentative efforts 
towards co-operation that began as soon as the magnitude 
and probable duration of the war were appreciated by the 
Allied Governments. The Food Control, the Inter-Allied 
Munitions Council, the Inter-Allied Maritime Transport 
Council, and finally, the Program Committees, were a grad- 
ual growth, and when the war finally closed they were at 
the very height of their efficiency. Had the war gone on 
a little longer a Raw Materials Council would undoubtedly 
have been added to the others to deal with the raw ma- 
terials of chief importance not already administered by the 
Munitions Council, notably wool, cotton, hides, leather, 
tobacco, paper, timber, petroleum, flax, hemp, jute, coal and 
coke. 

The economic organization of the Allies is important 
because it offers both precedent and model for the peace- 
time handling of the same problem. The Food Control took 
its final international shape in 1918, when the Council of 
Four was set up. This body included the four Food Con- 
trollers of principal importance, namely, those of the 
United States, Great Britain, France, and Italy. In 1917 
a scientific commission had already been organized to find, 
if possible, methods of solving the food problems of the 



224 



The Economic Causes of Modern War 



Allies, and during the same year another body took over the 
control of meats and fats. The business of this organization 
was to administer the buying and distribution of meats, 
butter, cheese, oils and fats of all kinds, and canned goods. 
A wheat executive worked in America through two agencies. 

The vexing problem of transport was handled by the 
Inter- Allied Maritime Transport Council, which was formed 
after the Paris Conference in 1917. In the very beginning, 
the French wished to make of this a paramount economic 
body. Through the nature of its work, it came in the end 
to make its influence felt through the whole organization 
of the Allies and to become almost supreme. 

In charge of each of the twenty-one chief raw materials 
was a Program Committee, by which the varying claims 
of the Allies were adjudged and a division made of the com- 
mon stock, so far as it would go. The list of commodi- 
ties thus administered included: ^ 



1. Cereals 

2. Oils and seeds 

3. Sugar 

4. Meats and fats 

5. Nitrates 

6. Aircraft 

7. Chemicals 

8. Explosives 

9. Non-ferrous metals 

10. Mechanical transport 

11. Steel 

12. Tin 

13. Wool 

14. Cotton 

15. Hides and leather 

16. Tobacco 

17. Paper 

18. Timber 

19. Petroleum 

20. Flax, hemp, and jute 

21. Coal and coke 



. Co-ordinated by the Food Control 



Co-ordinated by the Munitions 
Council 



The use of these was to have been 
co-ordinated by a Raw Materials 
Council 



^J. L. Garvin: Economic Foundations of Peace, ch. iv. 



The League of Nations 225 

Because a Raw Materials Council was never formally 
organized, it must not be inferred that the handling of the 
problem of the international distribution of these commodi- 
ties was not in all respects the same as in the case of others. 
Many raw materials were already being administered by 
the Munitions Council, especially metals and ores; and the 
military authorities of the various nations, of course, had a 
great deal to say with regard to the distribution of wool, 
hemp, flax, hides, and tanning materials, which were of 
direct concern to the armies in the field. 

Inadequate as such an outline of the prodigious task of 
administering the economic affairs of most of the world 
during the most trying period of its history must be, it is 
none the less sufficient to indicate the nature of interna- 
tional economic co-operation in time of peace. The two 
difficulties of food supply and raw materials, which are 
most pressing in peace, were adjusted with a minimum of 
friction amid the pressing claims of many nations in time 
of war. The adjustment was made by the Program Com- 
mittees as a result of economic study of the previous con- 
sumption of each country, of its needs, and of its own 
capacity for producing the particular commodity in question. 

This task, difficult alike because of its greatness and the 
delicacy of the questions involved, was successfully accom- 
plished with administrative machinery which had to be 
improvised under the trying conditions of war-time. A 
more completely organized economic union in the future, 
armed with like plenary powers and fuller opportunities 
for investigation, should be able, in case of need, to adjudi- 
cate fully and justly the conflicting claims to raw materials 
and to food supplies of various countries. 

But it is not likely that so complicated a machinery will 



226 The Economic Causes of Modern War 

be required. Freedom of access to all countries in the Far 
East, the Near East, and in Africa, with adequate guaran- 
tees of security against being isolated from these markets 
and sources of supply by interference with transport, will 
leave these matters very largely to the adjustment of ordi- 
nary business competition. Under these conditions inter- 
national economic rivalry need no more lead to hostilities 
than ordinary competition within a state leads to war 
among its citizens. 

During the World War there was in operation on a prac- 
tical basis, a League of Nations with economic as well as 
political functions. Military, naval, and economic power 
alike were wielded by the League of the Allies; but it was 
only because of the economic organization that the success 
of the military and naval power was possible. 

The League as at present constituted does not make com- 
plete provision for even an approach to such an economic 
program, but it does take the necessary first step toward 
such a policy. "Free trade spheres" or "spheres of equal 
opportunity" have not been created in the colonial storm 
centres, nor has the principle of the open door in China 
been specifically reasserted — measures which if taken would 
serve at once to reassure all the industrial nations, large 
or small, that are haunted with the perpetual fear of find- 
ing the world closed against them. The freedom of the seas 
has not been won, nor have merchant vessels been placed 
on the same footing of immunity from seizure as private 
property on land. 

The protest against this state of affairs, coming largely 
from German sources, has been regarded with natural dis- 
trust. Yet the protests made by the Germans have an 
element of truth in them; and they express what many of 
the smaller nations think and keep to themselves. A para- 



The League of Nations 227 

graph from Matthias Erzberger's book, The League of 
Nations, is typical of this group of complaints: ^ 

"The sovereignty of one Power or group of Powers over the 
great trade routes of the ocean cannot be reconciled with the 
equal privileges of all nations. ... If violence is to be banished 
from international life, one nation alone must not possess the 
means of enforcing its will, as represented by the possession of 
all the straits and coaling stations, and their protection by 
means of warships. The seas must be free. They should belong 
to all the nations in equal measure." 

In another passage the author returns to the same 
theme : ^ 

"So long as the sea-power of one nation exceeds the sea-power 
of every other nation, so long as one nation holds in her hands 
all the important straits and sea routes, so long as one nation 
possesses practically all the coaling stations on the great trade 
routes, so long will there exist a menace to all other nations. 
Even if the menace is not operative in time of peace, it is, merely 
by the fact of the existence of the military resources from which 
it arises, a latent 'political power which is contrary to the sense 
of international equality of rights at sea, arouses distrust, and 
poisons the political atmosphere." 

The tone of these complaints is perfectly familiar; and 
the important thing about them is that very familiarity. 
These are exactly the same things that the Germans said 
before the war. The menace to sea routes and therefore to 
industry brought about the building of the German fleet 
and was one of the important underlying causes of the 
World War. Herr Erzberger's book, however, has appeared 
since peace was made, a circumstance which is a reminder 
that nothing has been done to remove this danger to the 

* Matthias Erzberger: The League of Natiom, p. 161. I have omitted 
italics in some places. 
'Ibid., p. 216. 



228 The Economic Causes of Modern War 

peace of the world. Untaught by the evils from which we 
have but now emerged, we are going blindly onward in the 
old path. A complete guarantee by the League of all 
trade routes, both by land and sea, joined with immediate 
access to colonial markets and raw materials, would cer- 
tainly go a long way toward assuring permanent peace. 

The extent to which the League of Nations does make 
provision for economic readjustment with a view to the 
reduction of hostility is very slight, even though it offers 
hope for future development. Among the six bodies which 
carry on its business, there is none that is specifically eco- 
nomic in its functions. With the possible exception of 
Mandataries and the Mandatary Commission, none of 
these six bodies, the Executive Council, the Body of Dele- 
gates, the Military and Naval Commission, the Bureau of 
Labor, the Mandatary Commission, and the Permanent 
Secretariat have any power whatever to deal with the most 
important group of international questions. 

In the Covenant of the League only three articles even 
touch economic questions. These are: 

ARTICLE XVI 

"Should any of the High Contracting Parties break or dis- 
regard its covenants under Article XII, it shall thereby, ipso 
facto, be deemed to have committed an act of war against all 
the other members of the League, which hereby undertake im- 
mediately to subject it to the severance of all trade or financial 
relations, the prohibition of all intercourse between their na- 
tionals and the nationals of the covenant-breaking state, and 
the prevention of all financial, commercial, or personal inter- 
course between the nationals of the covenant-breaking state and 
the nationals of any other state, whether a member of the 
League or not. . . . 

''The High Contracting Parties agree further that they will 
mutually support one another in the financial and economic 



The League of Nations 229 

measures which may be taken under this article, in order to 
minimize the loss and inconvenience resulting from the above 
measures, and that they will mutually support one another in 
resisting any special measures aimed at one of their number by 
a covenant-breaking state and that they will afford passage 
through their territory to the forces of any of the High Con- 
tracting Parties who are co-operating to protect the covenants 
of the League." 

ARTICLE XIX 

". . . Other peoples, especially those of Central Africa, are at 
such a state that the mandatory . . . will also secure equal op- 
portunities for the trade and commerce of the other members of 
the League." 

ARTICLE XXI 

"The High Contracting Parties agree that provision shall be 
made through the instrumentality of the League to secure and 
maintain freedom of transit and equitable treatment for the 
commerce of all states members of the League, having in mind 
among other things, special arrangements with regard to the 
necessities of the region devastated during the war of 1914-18." 

This is the extent of the specific provision for the adjust- 
ment of economic difficulties, which we have seen to be 
the most prolific cause of wars. The Covenant recognizes 
the power of economic and financial pressure against a 
refractory state. Articles XIX and XXI contain at least 
a recognition of the need for free access to colonies for all 
powers, and of the importance of the freedom of trade 
routes. But the League fails to secure these essentials. 
The problem of security remains unsolved. As it stands at 
present, the League is only a beginning, perhaps all that 
could be expected at the present time. 

Even if the League succeeds in solving the vexed prob- 
lems of raw materials, food, markets, and trade routes, 
there will remain the difiiculty of finding room for the 



230 The Economic Causes of Modern War 

surplus populations of states which are unwilling to see 
their citizens domiciled under foreign flags. For this the 
only solution is further colonial readjustment, without 
affecting international freedom of approach to markets in 
colonies, but so altering the boundaries that there may be 
room in the world for all the nationalities to maintain their 
coherence. 

Whether it endures or whether it ends in failure, the pres- 
ent League is at least an attempt at the solution of the 
problems. At least it offers ground for hope that a way 
may yet be found for relief of the economic friction that 
has caused so much warfare in the past, through the recog- 
nition of the need of all the nations of the world for 
security in their inevitable economic interdependence. 



BIBLIOGRAPHY 



Generaxi Reference Histories 

Wars from 1878 to 1918 

Causes of War 

League op Nations 

General 



BIBLIOGRAPHY 

(Note: The volumes listed here include most of the authorities con- 
sulted. A few statistical reference books have been omitted, and 
contemporary articles from various journals have been listed only 
when of especial importance. References to others are invariably 
given in foot-notes.) 

GENERAL REFERENCE HISTORIES 

Cambridge Modern History, Vol. XII; The Latest Age, Cam- 
bridge University Press, 1917. — An authoritative work but 
with a marked British bias. 

Hazen, Charles Downer: Europe Since 1815, New York, 
Henry Holt & Co., 1910. — Useful but rather fragmentary. 

Hazen, Charles Downer: Modern European History, New 
York, Henry Holt & Co., 1917. — Elementary in its style 
but affording a good general survey of the history of the 
period. 

Holt, Lucius Hudson, and Chilton, Alexander Wheeler: 
History of Europe from 1862 to 1914, New York, Macmil- 
lan, 1917. — A concise and accurate history. A study of 
political sequences, with excellent military studies by Cap- 
tain Chilton, the junior author. 

Rose, J. Holland: The Development of the European Na- 
tions, 1870-1914, New York and London, Putnams, 1916. 
A general study of European history during approximately 
the period covered by the present volume. 

WARS FROM 1878 TO 1918 

AFGHAN WAR 

Adye, Sir J. M.: Indian Frontier Policy, London, Smith, Elder 
& Co., 1897. — A discussion of the Afghan question from the 
point of view of an English colonial official. 

Causes of the Afghan War, Being a Selection of the Papers Laid 
Before Parliament, London, 1879. The editor is not named. 

233 



234 The Economic Causes of Modern War 

Dacosta, John: A Scientific Frontier, London and Calcutta, 
W. H. Allen, 1891. — This work is violently condemnatory 
of British policy. 

Forbes, Archibald: The Afghan Wars, 1839-1842 and 1878- 
1880, New York, Scribners, 1892. — Contains a keenly crit- 
ical study of the causes of the war by a correspondent who 
has probably seen more fighting than any other European. 

Second Afghan War, Account by the British Army Intelligence 
Service, London, Murray, 1908. 

ZULU WAR 

CoLENSO, Frances Ellen: History of the Zulu War and Its 
Origin, London, Chapman Hall, 1880. — An account by the 
daughter of Bishop Colenso, the distinguished Biblical critic. 
A defense of the natives. 

Gibson, J. Y.: The Story of the Zulus, New York, Longmans, 
1911. An impartial statement of facts. 

Johnston, Sir Harry: Britain Across the Seas: Africa, Lon- 
don, National Society's Depository, 1910. — Imperialistic. 

Norris-Newman, Charles L.: In Zululand with the British 
Throughout the War of 1879, London, W. H. Allen, 1880.— 
A contemporary account. 

WiLMOT, A.: History of the Zulu War, London, Richardson & 
Best, 1880. — British colonial point of view. 

the nitrate war 

Anon.: Difficulty Between Chile on the One Hand and Peru 
and Bolivia on the Other, n.d. — A pamphlet issued as 
Chilean propaganda in English. 

Anon.: Guerre entre he Chili, Le Perou, et La Bolivia, Paris 
Imprimerie Nouvelle, 1879. — A contemporary collection of 
Chilean documents and comments favorable to Chile from 
the European press. 

Anon.: "The Tacna-Arica Controversy," The Covenant, a 
Quarterly Journal of the League of Nations: i: 426-429: 
Apr., '20. — A non-partisan summary of the origin and pres- 
ent status of the dispute. 



\ Bibliography 235 

'\ 

4.LZAMARA, I.: Peru and Chile, n.d. — A reprint from La Re- 

forma Social. — Comment on the renewal of the dispute 

during 1918, by a former Vice-President of Peru. 

Arano, Diego Barros: Histoire de la Guerre de la Paciflque, 
Paris, Librairie Militaire de J. Dumaine, 1881. — Primarily 
a military study, but, like most military histories, contains 
a succinct chapter on war causes. 

Arthur, Chester A.: Message from the President of the 
United States, Transmitting Papers Relating to the War in 
South America and Attempts to Bring About a Peace, 
"Washington, Government Printing OflBce, 1882. — Contains 
numerous documents extremely ill-arranged. 

Boyd, U. Nelson: Chili: Sketches of Chili and the Chilians 
During the War, London, W. H. Allen & Co., 1881. — A clear 
but not very comprehensive chapter on the dispute over the 
nitrate lands. The date of the declaration of war is errone- 
ously given. 

Le Leon, M.: Souvenirs a L'Armee Chilienne, Paris, Librairie 
Militaire, L. Baudoin et Cie., 1883. — A study by a French 
naval officer. 

Mantua, V. M., and Pezet, F. A.: The Question of the Pa- 
cific, Philadelphia, Press of Geo. F. Lasher, 1901. — A Peru- 
vian statement, containing an excellent map. 

Official: Diplomatic Debate of 1918, Valparaiso, South Pa- 
cific Mail, 1918. — Documents of the foreign offices. 



occupation of EGYPT 

Arminjon, Pierre: La Situation Economique et Financiere de 
L'Egypte, Le Soudan Egyptien, Paris, E. Pichon, 1911. A 
French statistical study. 

Bourgeois, Roger: La Crise ^gyptienne, These, Paris, A. Rous- 
seau, 1913. — A similar piece of work. 

Cromer, Evelyn Baring, First Earl of: Modern Egypt, New 
York, Macmillan, 1916. — Authoritative first-hand account. 
Natiu-ally imperialist. 

EiD, Alfred: La Fortune Immobiliere de L'Egypte et sa Dette 
Hypothecaire, Paris, F. Alcan, 1907. — A careful study. 



236 The Economic Causes of Modern War 

Gavillot, J. C. Aristide: L'Angleterre Ruine L'Egypte, Paris, 

J. Andre et Cie., 1895. — Unnecessarily Anglophobe. 
Haekal, Mohamed Husein: La Dette Publique Egyptien%e, 

These, Paris, A. Rousseau, 1912. — A condensed view of 

Egyptian finances. 
MiLNER, Alfred: England in Egypt, New York, Macmilian, 

1912. — Interesting expression of English opinion. 
NoAiLLES, A. M, R. A., VicoMTE de: Les Anglais en Egypte, 

Paris, 1898.— Significant because of source and date. 
WoRSFORD, W. Basil: The Future of Egypt, Collins' Clear Type 
Press, n.d. — Concise statement of the British attitude uoday. 

ABYSSINIAN WARS 

Baldissera, Antonio: Rapport sur les Operations Militaires de 
la Campaigne D'Afrique, Paris, H. Charles-Lavauselle, 1898. 
— First-hand account by an Italian official. 

Berkeley, George Fitz-H.: The Campaign of Adowa, West- 
minster, A. Constable & Co., 1902 — A general study. 

Castonnet des Fosses, Henri: L'Abyssinie et les Italiens, 
Paris, P. Tequi, 1897. — A brief summary of colonial policy. 

Pellenc, Capt. a. J. J. A.: Les Italiens en Afrique, Paris, L. 
Baudoin, 1897. — A French military study. 

chino-japanese war 

Ariga, Nagao: La Gueire Sino-Japonaise au Point de Vue du 
Droit International, Paris, A. Redone, 1896. — A study by a 
Japanese university professor. 

BujAC, Emile: La Guerre Sino-Japonaise, Paris, Henri-Charles 
Lavauselle, 1904. — French military criticisms. 

Burleigh, Bennett: The Empire of the East, London Chap- 
man and Hall, 1905. — A popular account by a famous British 
war correspondent. 

Sauvage, Lieutenant: La Guerre Sino-Japonaise, Paris 
Libraire Militaire de L. Baudoin, 1897. — Intended for mili- 
tary use but excellent on the causes of the war. 

"Vladimir" (pseud.) : The China- Japanese War, New York, 
Scribners, 1896. — Valuable study of the causes; the choice of 
a Russian pseudonym is prophetic. 



Bibliography 237 



BOXER REBELLION 

Bland, J. P. 0.: China Under the Empress Dowager, Philadel- 
phia, J. B. Lippincott, 1910. — General survey of the events 
preceding the war. 

Cheminon, Jules: Les Evenements Militaires en Chine, Paris, 
P. R. Chapelot, 1902. — Survey of causes. 

Clement, Paul H. : The Boxer Rebellion, a Political and Dip- 
lomatic Review, New York, Columbia University, 1915. — 
By far the best book on the subject. A careful study and 
analysis of the causes of the war and an evaluation of their 
relative importance. 

HoLCOMBE, Chester: The Real Chinese Question, New York, 
Dodd, Mead & Co., 1900. — Investigation of Chinese con- 
ditions. 

Landor, a. H. S.: China and the Allies, New York, Scribners, 
1901. — Both sides of the question presented. 

RUSSO-JAPANESE WAR 

AsAKAWA, Kanichi: The Russo-Japanese Conflict, Boston, 
Houghton, Mifflin & Co., 1904. — Acute analyses of the eco- 
nomic motives on both sides, with thorough documentation 
and many statistics. 

"Chausseur" (Pseud.) : A Study of the Russo-Japanese War, 
London, William Blackwood & Sons, 1915. — Survey of rela- 
tions between the two powers. 

China Yearbook, 1919-20, London, George Routledge & Son, 
New York, E. P. Dutton. — A useful reference book. 

Cowen, Thomas: The Russo-Japanese War, London, Edward 
Arnold, 1904. — Contains frequent expression of Marquis 
Ito's opinions not otherwise obtainable. 

Japan Yearbook (Y. Takenob, ed.), Japan Yearbook Office, 
Tokyo, 1918. 

Japan Yearbook, 1913-1914, Japan Gazette Co., Yokohama, 1914. 
— Both these contain much useful information. 

Kinai, M.: The Russo-Japanese War {Official Reports), Tokyo, 
The Shimbashido, n. d. — An excellent Japanese account. 



238 The Economic Causes of Modern War 

KuROPATKiN, General Alexei Nikolayevitch : The Russian 
Army and the Japanese War, Captain A. B. Lindsay, trans., 
New York, E. P. Button, 1909. 

McCoRMiCK, Frederick: The Tragedy of Russia in Pacific 
Asia, London, Grant Richards, 1909. Of value only as a 
study of Russian policy. 

McLaren, W. W.: A Political History of Japan During the 
Meiji Era, 1867-1912, London, George Allen & Unwin, Ltd., 
New York, Scribners, 1916. First-hand information by an 
American economist familiar with the people and the 
country. 

MiLLERAND, Thomas: Dcmocracy and the Eastern Question, 
New York, The Century Company, 1919. — Examination of 
the Eastern question with special reference to the United 
States. 

PiNON, Rene: La Lutte pour le Pacifique, Paris, Perrin et Cie., 
1916. — A study of the origins and results of the war apart 
from its incidents. Some attention to American problems 
in the Philippines. 

Porter, R. P.: Japan, the Rise of a Modem Power, Oxford, 
The Clarendon Press, 1918. — Economic analysis. 

Ross, Colonel Charles: An Outline of the Russo-Japanese 
War, London, Macmillan, 1912. — Not very acute account 
of causes but a good working outline, as its name implies. 

Sherrill, Charles H.: Have We a Far-Eastern Policy? New 
York, Scribners, 1920. The author is an American diplomat. 

German General Staff: Official Account of the Russo-Japa- 
nese War, Lieutenant Karl von Donat, translator. — A vo- 
luminous work, but with an excellent account of the causes in 
fairly brief compass. 

CUBAN insurrection AND SPANISH-AMERICAN WAR 

BujAC, Emile: La Guerre Hispano-Americaine, Paris, H. 
Charles-Lavauselle, 1899.^A European view of the conflict. 

Callahan, James M.: Cuba and Its International Relations, 
Baltimore, Johns Hopkins University Press, 1899. — Inter- 
esting as a contemporary account. 



Bibliography 239 

Chadwick, French E.: Relations of the United States and 
Spain, New York, Scribners, 1911. — Deals mainly with 
diplomacy. 

Draper, Andrew Sloan: Rescue of Cuba, New York, Silver 
Burdett and Co., 1910. — A little economic information. 

Gossip, G. H. D.: "The Mournful Case of Cuba," Fortnightly 
Review: 69: 832-843: May, '98. Much valuable data. 

Latane, J. H.: America as a World Power, New York, Harpers, 
1907. — A general consideration of America's new role with 
some attention to Cuba. 

Latane, J. H.: Diplomacy of the United States with Regard to 
Cuba, American Historical Association, Annual Report, 1897, 
pp. 217-277. — Mainly diplomatic. 

Lodge, Henry Cabot: The War with Spain, New York, 
Harpers, 1899. — Interesting because of the author's position. 

Matheson, Fred J.: "The United States and Cuban Inde- 
pendence," Fortnightly Review: 69: 816-832: May, '98. 

Morrison, Charles: The War with Spain, Philadelphia, J. 
B. Lippincotts, 1899. — Contemporary but rather popular. 

Robinson, Albert G.: Cuba and the Intervention, New York, 
Longmans, 1905. — Covers the whole period of the disturb- 
ance and investigates the economic causes completely. 

Taylor, Hannis: "A Review of the Cuban Question in its 
Economic, Political, and Diplomatic Aspects," North Ameri- 
can Review: 165:610-612, N., '97. 

GRECO-TURKISH WAR 

Bartlett, Sir Ellis Ashmead: The Battlefields of Thessaly, 

London, John Murray, 1897. — The author has evident 

Turkish sympathies. 
BiKELios, Demetrios: Le Role et les Aspirations de la Grece 

dans la Question d'Orient, Paris, Au Cercle Saint-Simon, 

1885. — The Greek account. 
Bickford-Smith, R. A. H.: Greece Under King George, London, 

R. Bentley & Son, 1893. — Incidental references to incidents 

preceding the war, 
Ministere des Affaires Etrangeres: Documents Diplomatiques, 

1897. — Like most diplomatic interchanges, fails to make 

clear the concealed economic motive. 



240 The Economic Causes of Modern War 

OiKONOMOPOULOs, Elia: 'laropia rov 'EWrjvorovpKov icoKeixov 
Athens, 1918. — A lengthy Greek account of the war. 



THE BOER WARS 

Cana, Frank R.: South Africa from the Great Trek to the 
Union, London, Chapman and Hall, 1909. — An English 
version characterized by great fairness to the Boers. 

Cappen, James: Britain's Title to South Africa, London, Mac- 
millan, 1901. — British imperialistic bias. 

Cecil, Evelyn, M. P.: On the Eve of the War, London, John 
Murray, 1900. — An English politician's ideas. 

Cook, Edward T.: The Rights and Wrongs of the Transvaal 
War, London, Edwin Arnold, 1902. — Fair effort at giving 
both sides. 

Doyle, Sir Arthur Conan: The Great Boer War, New York, 
McClure, Phillips, and Co., 1912. — Ardently imperialistic. 

Eybers, G. W.: Select Constitutional Documents Illustrating 
South African History, London, George Routledge & Sons, 
Ltd., New York, E. P. Button, 1918. — A good source book. 

Fisher, W. E. Garrett: The Transvaal and the Boers, London, 
Chapman and Hall, 1900. — General history. 

HoBSON, J. A.: The War in South Africa, Its Causes and Its 
Effects, New York, Macmillan, 1900. — An economic inter- 
pretation by a distinguished British economist, who accuses 
international financiers of deliberately precipitating the war. 

WiLMOT, Hon. A.: Manual of South African History, London, 
Kegan Paul, Trench, Triibner & Co., 1901.— Especially use- 
ful for the earlier parts of the history of the Boers. 

Mitchell, L.: Life and Times of the Right Honorable Cecil 
John Rhodes, New York, Kennerley, 1910. — A study of 
Rhodes' life is indispensable to understanding South African 
history. 

herero rising 

Calvert, Albert Frederick: Southwest Africa During the 
German Occupation, 1884-1914, London, T. W. Laurie, 1915. 
— Contains a brief statement of the facts. 



Bibliography 241 

Leutwein, Theodor: Die Kdmpfe mit Hendrik Witboi, Leip- 
zig, R. Voigtlander, 1912. — Colonel Leutwein's account of 
the first Hottentot rising, which preceded the Herero Rising. 

Sander, L.: Geschichte der Deutsches Kolonial-Gesellschaft 
fiir Sudwest-Afrika, Berlin, Dietrich Reimer, 1912. 

Articles under "German Southwest Africa" in the New Interna- 
tional Encyclopedia and the Encyclopedia Britannica. 



ITALO-TURKISH WAR 

Barclay, Sir Thomas: The Turco-Italian War, London, Con- 
stable, 1912. Both causes of the war and the operations are 
discussed. 

Braun, Ethel: What I Saw in Tripoli, London, T. F. Unwin, 
1914. — Study of the country, people, and resources. 

Foerster, Robert F.: Italian Emigration of Our Times, Cam- 
bridge, Harvard University Press, 1919. — An exhaustive 
investigation of the Italian population question. 

Lapworth, Charles: Tripoli and Young Italy, London, S. 
Swift & Co., 1912. — Examination of the relationship between 
Tripoli and Italy, the Italian need for the country, causes 
of the war, resources, etc. 

Mehier de Mathiuisieulx, Henri: La Tripolitaine d'Hier et 
de Demain, Paris, Hachette et Cie., 1912. — A French view 
which is important because of the Franco-Italian colonial 
relations. 

the BALKAN WARS 

Baucabeille, B. p. L.: La Guerre Turco-Balkanique, Paris, 

Chapelot, 1914. — A fairly complete account. 
Becker, G.: La Guerre C ontemporaine dans les Balkans et la 

Question d'Orient, Paris, Berger Levrault, 1899. Much 

valuable data on the causes of the wars. 
Campbell, Cyril: The Balkan War Drama, New York, Mc- 

Bride & Co., 1913. Attention given to incidents rather 

than causes of the war. 
Carnegie Endowment for Peace: Enquete dans les Balkans, 

Rapport, Paris, G. Cres et Cie., 1914. — A study of causes. 



242 The Economic Causes of Modern War 

Devas, Georges: La Nouvelle Serbie, Paris, Berger-Levrault, 

1918. Special study of Serbian difficulties and progress. 
Fellion, Georges: Entre Slaves, Paris, Societe des Ecrivains, 

FrauQais, 1894. — Useful for the Serbo-Bulgarian War. 
Forbes, Nevill: The Balkans (with A. Toynbee, D. Mitrany, 

D. G. Gogart) , Oxford, Clarendon Press, 1915.— Dr. Forbes 

is a distinguished Slavic scholar, better able to understand 

the Balkans than those who do not speak their languages. 
Fox, Frank: The Balkan Peril, London, Black, 1915. — The 

European significance of the Balkan troubles. 
Leffan, R. D. G.: The Serbs, Guardians of the Gate, Oxford, 

Clarendon Press, 1918. — A good handbook for Serbian his- 
tory. 
LoiSEAu, Charles: Le Balkan Slav et la Crise Autrichien, 

Paris, Perrin et Cie., 1898. — A French criticism of Austrian 

policy. 
Miller, William: The Balkans, New York, Putnams, 1911. — 

Description of the condition of the Balkan states before the 

outbreak of the wars of 1912-1913. 
Mozet, Alfred: Le Monde Balkanique, Paris, E. Flammarion, 

1917. A good deal of discussion of the wars and their 

genesis. 
Rankin, Colonel Reginald: Inner History of the Balkan War, 

London, Constable & Co., 1914. — Investigation of the causes 

of the wars. 
Regenspurgsky, Colonel Karl: La Guerre Serbo-Bulgare de 

1885, Lieutenant Barth, Translator, Paris, Berger-Levrault, 

1897. — Expression of an Austrian army officer's views. 
voN HuHN, Major Arthur Ernst: The Struggle of the Bulgars 

for Natural Independence under Prince Alexander, London, 

John Murray, 1886. 



the world war 

Ajam, Maurice: Le Probleme Economique Franco- Allemande, 
Paris, Perrin et Cie., 1914. — Author's official position and 
intimate knowledge makes the book of value. 

Bang, J. P.: Hurrah and Hallelujah, Jessie Biicher, translator, 
New York, George H. Doran Co., 1917. — A compilation of 



Bibliography 243 

German war utterances, giving an accurate view of one side, 
at least, of the national mind. 

Compilation: Modern Germany in Relation to the Great War, 
New York, Kennerley, 1916. — Most of the contributors are 
university professors. 

Compilation : Out of Their Own Mouths, New York and Lon- 
don, D. Appleton & Co., 1917. — German war utterances, 
some of which throw light on the attitude toward England. 

Cheradame, Andre: Le Plan Pangermaniste Demasque, Paris, 
Pion-Nourrit et Cie., 1916. — Well-known French expose of 
extreme Pan-German ambitions. 

Cheradame, Andre: La Question d'Orient, Paris, Plon-Nourrit, 
et Cie., 1915. — The attitude of all the Powers toward the 
Bagdad Railway. 

Davis, William Stearns: The Roots of the War, New York, 
Century Company, 1918. — Concise and accurate volume by 
an American scholar. 

Eckel, Edwin C. : Coal, Iron, and War, New York, Holt, 1920. 
— The most recent book on this important subject. 

Frank, Glenn, and Stoddard, Lothrop: The Stakes of the 
War, New York, Century Company, 1918. — A compilation 
of economic, historic, and political data, extremely well 
arranged. 

Gay, E. F.: 'Trench Iron and the War," Military Historian and 
Economist: 1:306-309: July, '16. A brief but illuminating 
summary based largely on German sources and the report of 
the Stockholm Geological Congress of 1910. 

Guyot, Yves: The Causes and Consequences of the War, F. 
Appleby Holt, translator, London, Hutchinson & Co., 1916. 
— Much attention to economics. 

Jastrow, Morris: The War and the Bagdad Railway, Phila- 
delphia, J. P. Lippincott, 1918. — Historical and geographical. 

Jeans, W. T.: The Creators of the Age of Steel, New York, 
Scribners, 1884. — A chapter devoted to Sidney Gilchrist 
Thomas. 

Naumann, Friedrich: Central Europe, Christabel Meredith, 
translator. New York, Knopf, 1917. — A prominent Ger- 
man, member of the Reichstag, gives his opinions as to 
Germany's situation. 



244 The Economic Causes of Modern War 

Nystrom, Anton: Before, During, and After 1914, H. G. 
de Walterstorff, translator, London, William Heinemann, 
1915. — A chapter on overpopulation and its dangers. 

PiNON, Rene: France et Allemagne, 1870-1913, Paris, Perrin 
et Cie., 1906. — A useful documentation of the Moroccan 
crisis. 

ScHMiTT, Bernadotte Everly: England and Germany, 1740- 
1914, Princeton, University Press, London, Humphrey Mil- 
ford, 1916. Valuable but rather pro-English. 

Seeley, J, R.: The Expansion of England, London, Macmillan, 
1914. Explanation of British colonization. 

Seligman, E. R. a.: An Economic Interpretation of the War, 
New York, D. Appleton & Co., 1915. — Much valuable in- 
vestigation of the economic causes of the World War. 

VON Bernhardi, General Friedrich: Germany and England, 
New York, G. W. Dillingham, 1915. — Explanatory volume 
to Germany and the Next War. Indicates German fear of 
British trade. 

CAUSES OF WAR 

Anon.: Historical Illustration of the Origin and Consequences 

of War, London Peace Society Tracts, No. 10, 1838. Out 

of date but not without value. 
Crosby, Oscar T.: International War, Its Causes and Its Cure, 

London, Macmillan, 1919. — The most exhaustive book on 

the subject. The author is a former army oflScer. 
Hall, H. Fielding: Nature of War and Its Causes, London, 

Hunt and Blackett, 1917. — A good general survey of the 

field. 
Howerth, I. W.: "The Causes of War," Scientific Monthly: 

2:118-124, F., '16. An interesting review of this phase of the 

subject. 
Oliver, F. S.: Ordeal by Battle, London, Macmillan, 1915. — 

Conventional "war book" but with a fair discussion of the 

general causes of wars. 



Bibliography 245 

LEAGUE OF NATIONS 

Beery, Lieutenant Trevor T.: The Hope of the World, Lon- 
don, P. S. King & Son, 1919. — An accurate estimate of the 
significance of raw materials. 

Butler, Sir Geoffrey: A Handbook to the League of Nations, 
London, Longmans Green, 1919. — Conventional historico- 
legal discussion. Good outline of the machinery of the 
League and a convenient grouping of documents. 

Brailsford, Henry Noel: A League of Nations, New York, 
Macmillan, 1917. — Examination of the economic conditions 
which make a league necessary. 

Covenant, The, A Quarterly Journal of the League of Nations, 
Nos. 1, 2, and 3. Discussion of problems affecting the 
League as they arise. Many maps and a full appreciation 
of economic conditions affecting the relations of states. 

Crozier, Alfred Owen: League of Nations: Shall It Be an 
Alliance or a Nation of Nationsf New York, Le Couver 
Press Co., 1919. — Advocates "territorial surgery" and inter- 
nationalization of important waterways. 

Crozier, Alfred Owen: Nation of Nations — A Way to Peace. 
Cincinnati, Stewart Kidd & Co., 1915. — Assertion of the 
practical value of the League. 

Dwight, W. Morrow: The Society of Free States, New York, 
Harper, 1919. Like Mr. Garvin, the author reads a moral 
from the economic co-operation of the Allies in war-time. 

Erzberger, Matthias : The League of Nations, New York, Holt, 
1919. — A clear expression of the German attitude. Especial- 
ly to be examined because of its economic complaints. 

Garvin, J. L.: The Economic Foundations of Peace, London, 
Macmillan, 1919. — Insists on economic justice as the only 
ground of permanent peace. Rather incoherently written 
as a whole, but of the greatest value. 

Hamilton, General Sir Ian: The Millennium, London, Ed- 
ward Arnold, 1919. — "I have arrived at a grand junction 
where on the one hand I see reflected into the sky Old 
Glory floating side by side with our own Imperial Standard; 
and on the other, darkness — darkness." 

HoBSON, J. A.: Towards International Government, New York, 
Macmillan, 1915. — An economist's view. 



246 The Economic Causes of Modern War 

La Fontaine, Henri: The Great Solution, Magnissima Charta, 
Boston, World Peace Foundation, 1916. — A political rather 
than economic study of the League. 

Lawrence, T. J.: The Society of Nations, Its Past, Present, and 
Possible Future, New York, Oxford University Press, 1919. 
— Historical and legal. 

MiLHAUD, Edgard: La Societe des Nations, Paris, Bernard 
Grasset, 1917. — One chapter on the economic sanction. 

Minor, Raleigh C: A Republic of Nations, New York, Oxford 
University Press, 1918. — A review of current opinion. 

Official Journal, Nos. 1, 2, and 3. — Documents of the League of 
Nations. 

Paish, George: A Permanent League of Nations, London, T. 
Fisher Unwin, 1918. — Discussion of the importance of 
economic interdependence and international trade as affect- 
ing war and peace. 

Sayre, Francis Bowes: Experiments in International Admin- 
istration, New York, Harpers, 1919. — Chiefly historical. 

Smuts, Lieutenant General the Rt. Hon. Jan C.: The 
League of Nations, a Practical Suggestion, New York, Nation 
Press, 1919. — A careful and able discussion of economic and 
financial aspects is included. 

Stall YBRASS, W. T. S.: A Society of States, New York, E. P. 
Dutton, 1919.— Economic conditions wholly neglected. 

Wells, H. G.: Idea of a League of Nations, Boston, Atlantic 
Monthly Press, 1919. — A group of eminent collaborators 
have assisted the author; they deduce the necessity of the 
League from the nature of our civilization. 

WooLF, Leonard S. (editor) : Framework of a Lasting Peace, 
London, Allen and Unwin, 1917. — Contains the Hague 
Minimum Programme, the Fabian Society's Draft Treaty, 
and other proposals. 

GENERAL 

Alfassa, Maurice: L'Apres Guerre, Paris, Belin Freres, 1918. — 

Economic effects of the war. 
Angell, Norman (Pseud.) : Foundations of International 

Polity, London, William Heinemann, 1914. — War held to be 

unprofitable. 



Bibliography 247 

Angell, Norman (Pseud.) : The Great Illusion, New York, 
Putnams, 1910. — Development of the author's well-known 
pacifism and theory of the economic prevention of war. 

Barker, J. Ellis: Economic Statesmanship, London, John Mur- 
ray, 1918. — Study mainly of after-war problems. 

Brown, Philip M.: International Realities, New York, Scrib- 
ners, 1917. — Advocates a gentler sort of Realpolitik. 

Bourne, Randolph S. : Towards an Enduring Peace, American 
Association for International Conciliation, 1916. — A valuable 
symposium. 

Brailsford, Henry Noel: The War of Steel and Gold, A Study 
of the Armed Peace, New York, Macmillan, 1915. — Dis- 
passionate investigation of the effects of economics and 
finance on international relations. 

Chester, Rear- Admiral Colby C: "Present Status of the 
Monroe Doctrine," Annals of the American Academy of 
Political and Social Science, July, 1914. 

Clark, J. Maurice, Hamilton, Walter H., and Moulton, 
Harold G.: Readings in the Economics of War, Chicago, 
University of Chicago Press, 1918. — A collection of most 
suggestive material, mainly journalistic. 

Dawson, W. H.: Evolution of Modern Germany, New York, 
Scribners, 1914. — An excellent study of German develop- 
ment. 

Dickinson, G. Lowes: The Choice Before Us, New York, 
Dodd, Mead & Co., 1917. — Causation of wars and preven- 
tion of future wars. 

Dillon, E. J.: The Inside Story of the Peace Conference, New 
York, Harpers, 1920. — Vivid picture of the Conference, with 
discussion of economic interests among others, by an eminent 
authority. 

Drage, Geoffrey: Austria- Hungary, London, John Murray, 
1909. — Much information on economic relations. 

Faries, John Cuthbert: The Rise of Internationalism, New 
York, W. D. Gray, 1915. — The Appendix contains a collec- 
tion of material not accessible elsewhere. 

Fullerton, William M.: Problems of Power, New York, 
Scribners, 1913. — Published immediately before the war. 



248 The Economic Causes of Modern War 

Contains a full discussion of the world situation, as it existed 
then. 

Gibbons, Herbert Adams: The New Map of Europe, Century- 
Company, 1914. 

Gibbons, Herbert Adams: The New Map of Africa, Century 
Company, 1916. 

Gibbons, Herbert Adams: The New Map of Asia, Century 
Company, 1920. — A series of anti-imperialistic researches 
into the imperialism of all nations. 

Haskins, Charles Homer, and Lord, Robert Howard: Some 
Problems of the Peace Conference, Harvard University Press, 
1920. First-hand information by two eminent authorities. 

Hassall, Arthur: History of British Foreign Policy from the 
Earliest Times to 1912, Edinburgh and London, W. Black- 
wood & Son, 1912. — Covers the field thoroughly. 

Hirst, F. W.: The Political Economy of War, London, J. M. 
Dent, 1916. — The only existing text-book. It neglects, 
however, the economic causes. 

Hutton, J. Arthur: The Cotton Crisis, Manchester, British 
Cotton-Growing Association, 1904. — Exposition of the 
British difficulties with regard to cotton. 

Keynes, John Maynard: The Economic Consequences of the 
Peace, New York, Harcourt, Brace & Howe, 1920. — Insist- 
ence upon economic justice as a basis of peace. 

Latane, J. H.: From Isolation to Leadership, Garden City, 
Doubleday Page & Co., 1918. — Study of the evolution of 
the international status of America. 

Lawson, W. R.: Modem War and War Taxes, Edinburgh and 
London, W. Blackwood & Sons, 1912. — Refutation of Mr. 
Norman AngelFs theories. 

Lambrino, Georges: Finance de Guerre, Paris, Sirey, 1913. — 
The relationship between finance and war. 

LiPPMAN, Walter: The Stakes of Diplomacy, New York, Holt, 
1915. — An admirable statement of the need of economic 
expansion and its relation to war. 

MuiR, Ramsay: The Expansion of Europe, Boston, Houghton 
Mifflin & Co., 1917. — Traces the motives and effects of im- 
perialism. 



Bibliography 249 

Robinson, E. V. D.: "War and Economics," Political Science 
Quarterly: 15:581-629: D., '00. Deals mainly with ancient 
wars. Highly suggestive. Good bibliography. 

Seligman, E. R. a.: The Economic Interpretation of History, 
New York, Columbia University Press, 1903. Carries fur- 
ther the notions of Karl Marx. 

Veblen, Thorstein B.: An Inquiry into the Nature of Peace 
and the Terms of Its Perpetuation, London and New York, 
Macmillan, 1917. — Theories of a well-known American 
writer. 



INDEX 



INDEX 



d'Abruzzi, Due, 131 

Abyssinian Wars, 46, 48, 49, 78-80 

Access to sea, 172, 173 

Achard, Franz Carl, 117 

Aden, 34 

Adowah, Battle of, 80 

Adrianople, 138 

Adriatic, 137 

Aerial warfare, 220 

Afghanistan 

frontier, 99 

invasions, 35, 46, 48, 50-56 

Central, 191, 229 

development of, 210 

France in, 204, 185 

freedom of access, 226 

Germany in, 204 

opening of, 43, 44, 79 

slave trade, 198 

South, 185 

Stanley, Henry M., in, 43, 44 
African Review, 113 
Afrikanders, see Boers 
Agadir incident, 12, 142, 149, 156, 

157, 191, 192, 193 
Agordat, Battle of, 79 
Agriculture, 11, 199 
Agronomy, 199 
Ajam, Maurice, quoted, 19-n 
Albania, 133, 137, 170 
Alcohol, international congress on, 

199 
Aleppo, 162 

Alexander the Great, 165 
Alexander, Prince of Bulgaria, 77 
Alexandria, massacre at, 72 
Algeciras Conference, 157 
Algiers, 155 
Ali, Mohammed, 65 
Ali, Shere, 53 
Allenby, General, 3 
Alliance, see Triple Alliance 
Allies, economic union of, 222 
Alsace-Lorraine, 9, 44, 150, 204 
America, see United States 
America, South, British investments 
in, 184 



American cotton, 23, 212-214 
Amsterdam, port of, 158 
Amir of Afghanistan, 51, 53, 54 
Amur, 92, 99 
Ancestor-worship, 93, 95 
Ancon, Treaty of, 58, 63, 64 
Andes boundary question, 62 
Angell, Norman, quoted, 177 
Anglo-French Entente, 75 
Anglo-German trade rivalry, 142, 

144-150, 166, 210 
Anglo-Japanese Alliance, 100 
Anglo-Russian Agreement, 35, 39, 

56, 139 
Angora, 161, 169 
Annam, French in, 46, 48, 49, 81, 

82, 139 
Antafagasta, 61, 64 
Anti-imperialist tradition, Ameri- 
can, 27 
Antimony, 154 
Antwerp, port of, 158 
Armenia 

religion in, 4 

riots in, 46 
Arabian Ocean, 33 
Arabi Pasha, 71, 72 
Archangel, port of, 39, 97 
Argentina 

Chilean relations with, 62 

French investments in, 185 

revolts in, 46 
Arica, 59, 64 
Armada, Spanish, 190 
Army, Afghan, 52 
Art, international conference on, 

199 
Asakawa, K., quoted, 26 
Ashantee War, 46 
Asia 

British investments in, 184 

Central, 160 
Asia Minor 

economic penetration, 164 

economic unity, 163 

railways, 216 

Russian railway rights, 162 

strategic value, 164, 165 

Turkish military reservoir, 169 
Assan, Japanese victory at, 86 



253 



254 



Index 



Assouan dam, 67 

Assyria, 6, 165 

Atacama, Desert of, 57, 59, 60, 61 

Attache, commercial, 208 

Australia, British investments in, 

184 
Austria-Hungary 

Bagdad Railway, 170 

Balkan policy, 134, 135, 137, 172 

Berlin, Treaty of, 41 

Bulgarian trade, 174 

Capitulations, 68 and n. 

economic ambitions, 143, 144, 170- 
175 

economic situation, internal, 171 

Egyptian Debt, 68 

financial relations with Great 
Britain, 188 

French investments in, 184 

Hapsburg dynasty, 3 

markets, 78, 135, 138, 172 

Mittel-Europa, 158 

Rumanian trade, 174 

Serbo-Bulgarian War, 78 

Turkish trade, 174 

Wars of 1864 and 1866, 8 

War with Serbia, 186 
Austrian Succession, War of the, 2 
Automobiles, French export of, 24 

B 

Babylonia, 6, 165 

Bacteria in war, 221 

Bagdad Railway, 135, 158, 160, 161- 

170, 174, 218, 219 
Bahrein Islands, 35 
Baku, oil wells at, 56 
Balance of Power, 29, 198, 222 
Balkans, the 

Austrian ambitions in, 172 

French loans in, 139 

friction in, 219 

German aggressions in, 211 

Italian ambitions in, 175 

Russian influence in, 41 
Balkan Wars (1912-1913), 46, 48, 

132-139, 142, 174 
Ballin, Albert, 147 
Baltic Sea, 160 
Baluchistan, 35 
Banca di Roma, 131 
Bankers in war, 177, 178 
Bank of Russia, 180 
Bank of Tokio, 180 
Barley, 21, 26 
Barnato, 113 

Bartlett, Sir E. A., quoted, 126 
Bases, see Naval bases 



Baskets, Bavarian, 149 

Bassona, 166 

Bassorah, 162 

Battleships, damages to, 33 

Bavarian industries, 149 

Beaconsfield, Lord, see Disraeli 

Beaconsfield-Salisbury Cabinet, 53 

Beans, 26, 224 

Beets, see Sugar 

Beilul, occupation of, 79 

Beirut-Damascus line, 168 

Belgium 

Balkan trade, 173 

Capitulations, 68 

defense of neutrality, 6 

French investments in, 185 

invasion of, 141, 142 

iron imports, 151 

population density, 18-n. 
Belgrade, 1 
Bergasi, 131 
Berlin Bourse, 186 
Berlin, Congress of, 32, 38, 39, 41, 

43, 54, 77, 198 
Berlin, Treaty of, 42, 45, 142 
von Bernhardi, General, quoted, 

144-n. 
Bengal, Gulf of, 33, 35 
Bessemer, Sir Henry, 44 
Bessemer process, 152 
Bhutan, 35, 36 

Bismarck, 2, 8, 8-n., 41, 42, 129 
Black Sea, 39 
Blockade, 22 
Boer War, 46, 48, 49, 106-116, 139, 

149, 179 
Bolivia, 49, 57, 59, 60, 61, 62, 63 
Bombay, 165 
Bondelzwart natives, 126 
Bosnia-Herzegovina, 41, 142 
Bosphorus, 40, 41 
Boxer Rebellion, 46, 48, 90-96, 100, 

139, 210 
Boycott 

Chinese, 193 

Franco-German, 156, 157 
Brazil, French investments in, 185 
Bremen, port of, 147 
Breslau, 117 

Brewing companies, American, 209 
Briey, iron district, 151—152 
British Empire, see Great Britain 
Bulawayo Chronicle, 113 
Bulgaria 

Balkan Ware, 133, 134, 136, 139 

Battle of Slivnitza, 173 

debt to France, 193 

establishment of, 40 

freedom, 7 



Index 



255 



Bulgaria (continued) 

religion in, 4 

revolution in, 46 
Burgulu, 162 
Byzantium, see Constantinople 



Caisse de la Dette, 68 
Campbell-Bannerman, Sir Hugh, 

quoted, 148 
Canada 

British investments in, 184 

French investments in, 185 

population density, 18 
Canal Zone, Panama, 28-n. 
Cane, see Sugar 
Cane, Bavarian, 149 
Cape Argus, 113 
Cape Colony, 114 
Capital, German shortage of, 191 
Capitalists, in South Africa, 107, 

112, 113 
Capitulations, 68, 68-n 
Caribbean, 27-n 
Carthage, 14 

Casablanca incident, 8, 142, 157 
Cassala, Battle of, 79 
Caste, military and naval, 9, 10 
Catalonia, 119 
Cattle, international conference on, 

199 
Caucasus, 160 
Causes of war, listed, 2 
Cave Report, 69 
Ceramics, international conference 

on, 199 
Cereals, 24, 224 
Cetewayo, 57 
Ceylon, 32, 35 
Cheese, 224 
Chelmsford, Lord, 57 
Chemicals, 224 
Chemistry, in war, 221 
Chester, Admiral, quoted, 27-n 
Chile 

declaration of war, 58, 62 

economic aims, 57, 63 

explorations for guano, 60 

nitrate, 59, 61-64 

revolution in, 46 
China 

development of, 210 

early civilization, 197 

financial pressure on Japan, 
193 

foreign demands in, 90—94 

French investments in, 185 

German aggressions, 211 



China (continued) 

Japanese War, 46, 48, 49, 83-90 

Korean claims, 49 

open door in, 226 

partition of, 96, 97, 209, 217-n 

Russian loan, 91 

seizure of territory, 89 

share in Korean trade, 103, 104 

Thibet, suzerainty in, 35 
Chincha Islands, 58 
Chinese Empire, 93 
Chosen, see Korea 
Christianity, in war, 4 
Churchill, Winston Spencer, quoted, 

31 
Civil War, American, 5, 203, 208, 

213 
Clements, Paul H., quoted, 95 
Cleveland, President, 29-n 
Coal, 21, 224 
Cobden, quoted, 217 
Cobija, 59 
Coke, 224 
Cologne, 168 
-Colonies 

agronomy in, 199 

causes of war, 3, 7, 11, 12, 50, 56 

classic, 14 

defense of, 28, 30, 37 

India, 30-36 

methods of founding, 15 

need of, 27, 139, 215 

overpopulation, 18 

readjustment, 230 

rivalry for, 142 
Colombia, revolution in, 47 
Colquitt, Governor, quoted, 214 
Commercial attache, 208 
Concert of Europe, 197, 198, 222 
"Condor," H. M. S., 79 
Confederacy, 29-n 

Conferences, international, 198, 199 
Consei-vative Party, 53 
Consolidated Goldfields, 112 
Constantinople, 32, 39, 40, 41, 56, 
72, 97, 98, 124, 134, 135, 138, 
164, 167 
Co-operation, economic, of Allies, 

222-226 
Copper 

German supply, 21 

Japanese supply, 27 

in Morocco, 154 
Corsica, 130 
Cotton 

American, 23, 212-214 

British supply, 23, 212, 213, 214 

Caucasian, 160 

Egyptian, 64 



256 



Index 



Cotton (continued) 

French supply, 24, 212 

German supply, 21, 212 

in Civil War, 203 

in World War, 203 

Japanese supply, 26 
Courts, juvenile, 199 
Covenant, League of Nations, 222 
Cowen, Thomas, quoted, 86-n 
Crammond, Edgar, quoted, 188, 189 
Credit, industrial, 185 
Crete, 46, 124, 125, 126 
Creusot, 173 
Crimea, 40 

Cromer, Lord, 79; quoted, 64, 217-n 
Crosby, Oscar, quoted, 4 
Crown-Prince, Austrian, see Ferdi- 
nand 
Crown-Prince, Greek, 125 
Crusades, 4 
Cuba 

American influence in, 27-n 

American intervention, see Span- 
ish-American War 

economic conditions in, 116, 118 

insurrection, 46, 48, 116-123 

juntos, 122 

reciprocity, 120 

Spanish administration, 120, 122, 
123 

sugar situation, 118 
Cunern, 117 
Cyprus, 32, 34 

D 

Dahomey, French operations in, 46 

Dalmatia, 122, 175 

Dalni, 92, 99 

Damaraland, 126 

Damascus, 168 

Danube, 172, 173, 197 

Dardanelles, 97, 134 

Dardanelles expedition, 31 

Davis, Richard Harding, quoted, 150 

Death rate, German, 16 

DeBeers, 112 

Debt, Egyptian 

cause of war, 76 

Consolidated Debt, 71 

loans, 66 

totals, 70, 71 
Descent, in Moslem countries, 70 
Diamonds, South African, 108, 109 
Diamond Fields Advertiser, 113 
von Diedrichs, Admiral, 92 
Delagoa Bay, 111 
Denmark 

French investments in, 185 



Denmark (continued) 

grain imports, 212 

Virgin Islands, 28, 29-n 

War of 1864, 8 
Dillon, E. J., quoted, 4-n, 16-n 
Disraeli, 32, 41 
Dogali, Italian defeat at, 79 
Dominican Republic, 28-n 
Doumer, M., 82 
Dowager Empress, 94 
Doyle, Sir Arthur Conan, quoted, 

106-n 
Dragoman Pass, 77, 78 
Drang nach Osten, 124, 135, 143, 

158-60, 162 
Drang nach Osten, Slavic, 98, 99 
Dreadnaughts, 33 
Dual Control, in Egypt, 71, 72 
Dual Entente, 43 

Dual Monarchy, see Austria-Hun- 
gary 
Duelling, international conference 

on, 199 
Durazzo, 137 

Dutch, in British colonies, 110 
"Dumping," German, 149, 218 
Dynamite Monopoly, HI 
Dynastic ambitions, war cause, 5 

E 

East, see Far East and Near East 
Eckstein Group, 112, 113 
Economic penetration, 156, 160, 169, 

172 
Economic theory of history, viii, 11 
Economic union, 222-226 
Edward VII, quoted, 213 
Egypt 

allegiance, 34 

Bagdad Railway, danger from, 
164, 165 

British occupation, 46, 48, 64r-76, 
139, 216 

debt, 70, 71, 76 

Fashoda incident, 12, 74, 75, 191 

finances investigated, 69 

foreign investments in, 194 

French investments in, 184, 191 

loans, 66, 68 

neutrality in Tripolitan War, 132 

raw materials in, 64, 76 

revenues, 65 

revolt in, 72 

Sudan, wars in, 73-75 

tobacco, 118 
Egyptian Empire, 6 
Elgin Commission, 179 
Emigration, 28, 129 



Index 



257 



Empire 

Assyrian, 6 

Babylonian, 6 

Chinese, 35, 93 

Egyptian, 6 

German, 7, 25 

Holy Roman, 7 

Indian, 31 

Japanese, 24, 25 

Ottoman, 32, 158 

Roman, 11 

Russian, 50 
Ems telegram, 2 
Engels, Friedrich, 206 
England, population, 15 and 15-n 
Entente, 43, 75 

Entomology, international confer- 
ence on, 199 
Eritrea, Italian colony, 79, 80 
Erzberger, Matthias, quoted, 227 
Erzerum, 169 
Ethnike Hetaira, 125 
Eugenics, 199 

Euphrates Valley, 158, 159, 162, 164 
Europe, British investments in, 184 
Explosives, 224 
Exports, see Imports 



Fabian Society, 217-n 

Fao, 165 

Far East, 12, 139, 204, 218, 226 

Fashoda incident, 12, 74, 75, 191 

Fats, 224 

Fellaheen, 67 

Ferdinand, Archduke, 125, 142, 186 

Finance in war 

Boer War, 106, 116, 179 

dual role, 177, 178, 187, 192 

Russo-Japanese War, 179, 180 

World War, 181 
Financial difficulties in war, 194 
"Fists of Righteous Harmony," see 

Boxers 
Fiume, 135 
Flax, 224, 225 
Fleet, British, 9, 22, 30, 33 
Fleet, German, 9, 147, 227 
Fleet, Russian, 169 
Fleets, damages to, 33 
Flottenverein, 9 
Flour, Japanese, 26 
Fonseca Bay, 28-n 
Foochow, French fleet at, 82 
Food 

British imports, 23 

Control, 223, 224 

French imports, 23, 24 



Food (continued) 

German imports, 22 

Holland's needs, 20 

Italian situation, 132 

Japanese situation, 25—27, 83, 84 

supply, general European, 212 
Forbes, Archibald, quoted, 52 
Foreign investments 

American, 185, 190 

British, 183, 184, 192 

French, 184, 185, 192 

German, 183 
Formosa 

cession to Japan, 87 

French blockade, 82 
France 

Bagdad Railway, 167 

Balkan loans, 139-n 

Balkan trade, 173 

Berlin, Treaty of, 42 

birth rate, 18 

Capitulations, 68 

Chinese demands, 92, 93 

Egyptian debt, 68 

first Republic, 5 

Food control, 223 

foreign investments, 183, 190, 192, 
193 

Franco-German trade rivalry, 150- 
158, 204 

Franco-Prussian War, 8, 178, 183 

Haiphong, 81 

Hanoi, 81 

imports and exports, 23, 24 

iron, 151 

Mexico, 29-n 

Morocco, 202, 209, 211, 216, 219 

population, 15, 15-n 

press, in war, 2 

railways in Asia Minor, 168 

religions in, 4 

Russian loan, 180 

Texan dispute, 1 
Freedom of the sea, see Sea 
Free trade, 217 and 217-n 
Frontier, economic, 142 
Frontier, "scientific," 36, 52, 142 
Fruit, canned, 224 
Fuel, naval, 33, 34 
Fukien, province of, 92 
Furniture, Bavarian, 149 
Furs, see Hides 



G 



Garibaldi, Menotti, 72-n 
General Staff, American, 181, 182 
General Staff, German, 4-n, 178 
Genoa, merchants of, 190 



258 



Index 



Gensan, 99 

Georgia, raw materials in, 209 
Germany 
agriculture, decrease of, 20 
American loans, 192 
Balkan policy, 135, 139 
Balkan trade, 173 
Berlin, Treaty of, in, 42 
birth rate, 15, 16, 17, 18 
Chinese demands, 92, 93 
coal, 21 

competition with British, 142 
cotton, 21 
"dumping," 218 

financial relations, 185, 188, 189 
foreign investments, 183 
hegemony, 8 

imports and exports, 148, 212 
iron, 21, 151 
in Korea, 104 
in Morocco, 155, 209 
raw materials, 21 
religions in, 4 
Russian loans, 180 
shortage of capital, 149 
trade increase, 146, 147 
war reserve, gold, 178 
Gibraltar, 34 

von Gierke, Otto, quoted, 145-n 
Gilchrist, Percy, 152 
Glassware, 174 
Gortchakoff, Prince, 41 
Gold 
discovered in Rand, 108 
German war reserve, 178 
in Morocco, 154 
Wolseley, Sir Garnet, on, 109 
Gold-credit, 185 
Golden Horn, 32 
Gomez, General, 121 
Good Hope, Cape of, 32 
Gordon, General, 73, 74 
Goschen-Joubert mission, 69 
Goths, 11 

Grain imports, 212 
Granite, Bavarian, 149 
Great Britain 
attitude on Bagdad Railway, 167 
Balkan policy, 135 
birth rate, 18 
Chinese demands, 90-92 
financial relations, 188, 189 
food control, 223 
foreign investments, 183, 184 
French investments, 185 
imports and exports, 148 
Japanese alliance, 100 
Japanese loans, 180 
Korean trade, 104 



Great Britain (continued) 

Moroccan interests, 155, 209 

religions in, 4 

rivalry, internal economic, 208 

trade increase, 146, 147 

trade routes, 30 

Venezuela boundary, 29-n 

trade increase, 146, 147 
Greco-Turkish War, 46, 48, 123-126, 

139 
Greece 

ancient, 196 

Bulgarian treaty, 134 

Capitulations, 68-n 

colonization, ancient, 14 

Crete, 136 

freedom, 7 

hostilities during London Confer- 
ence, 138 

races, 133 
Guano, 58, 60 
Guatemala, 16 
Guiana boundary, 29-n 
Gundamuk, Treaty of, 54 

H 

Haidar-Pasha, 161, 164 
Hainan, Island of, 93 
Haingyondo, Province of, 85 
Haiphong, French seizure of, 81 
Haiti, 28-n, 47 

Hamburg-American line, 147 
Hanoi, French seizure of, 81 
Hapsburg dynasty, 3 
Harmony, Fists of Righteous, see 

Boxers 
Hawaiian Revolution, 46 
Hegemony, German, 8, 155 
Hemp, 159, 224, 225 
Herald, New York, 43 
Herero Rising, 46, 48, 49, 126, 127, 

139 
von Hertling, Baron, quoted, 163-n 
Herzegovina, see Bosnia-Herze- 
govina 
Hicks, General, 73 
Hides, 24, 174, 224, 225 
Hinze, Professor Otto, quoted, 144-n 
Hittites, 165 

Hobson, J. A., quoted, 106-n 
Holland 

Capitulations, 68-n 

French investments in, 185 

grain imports, 212 

iron imports, 151 

population, 18-n 

suffering in World War, 19, 20 
Holy Roman Empire, 7 



Index 



259 



Hongkong, seizure of, 90-n 

Hottentot Rising, 46, 127 

Huguenots, 108 

von Humboldt, Alexander, 58 

Hungary, see Austria-Hungary 

Hims, 11 

Hygiene, racial, 199 



Imperialism, American, 27 and 27-n 
Importation and shipping, Council 

for, 224 
Imports and exports 

Austrian, 174 

British, 23, 148 

freedom of, 215 

French, 23 

German, 21, 22, 148 

Italian, 24 

Japanese, 24 

Korean, 105 
Incas, Peruvian, 58 
Indemnity, French, 178 
Independent, New York, quoted, 

194 
India 

civilization, early, 197 

danger from Bagdad Railway, 
162, 164, 165, 166 

defense of, 64, 72, 76, 97, 218 

frontier, 51—53 

routes to, 30-36, 41, 49 

Russian ambitions, 32, 35, 39 

travel to, 168 

value to Great Britain, 30-36, 
218 
Indian Ocean, 33 
Indo-China, French in, 81, 82 
Industries 

Austrian, 172 

Bavarian, 149 

colonial requirements of, 18 

growth of, 11, 156 
Industrialism 

British, 203 

effect of, 11 

French, 205 

German, 205 

internationalism, relation to, 201 

overpopulation, cause of, 18 

population, relation to, 204 
Industrial states, 18, 19 
Insurrection, Cuban, 46, 48, 49, 116- 

123 
Insurrectos, 122 

Intelligence Service, British, 114 
Interdependence of nations, 202, 
213-218, 220 



International conferences (1914), 200 
Internationale, 206 
Internationalism, doctrine of, 196 
Internationalism, economic origin of, 

204 
International finance — see Finance 
International law, 34 
Intervention in backward states, 

209 
Investments, foreign 

American, 185 

amounts, 182 

British, 183, 184 

French, 183, 184, 185 
Ireland, civil war in, 3 
Iron 

British supply, 23 

German supply, 21 

Japanese supply, 27 

Korean exports, 104, 105 

Lorraine fields, 147, 151 

Ukraine fields, 159 
Irredentism, Serbian, 173 
Isandhlwana, 57 
Ismail Pasha 

bad faith of, 69 

canal stock sale, 32 

deposed, 70 

extortion, 67 

extravagance, 64, 65, 209 

seizure of land, 66 
Italy 

Abyssinian Wars, 46, 48, 49, 78-80 

Bagdad Railway, 170 

Balkan interests, 173, 175 

birth rate, 18 

Chinese demands, 94 

economic ambitions, 143, 144 

Egyptian debt, 69 

Egyptian sympathies, 72-n 

Emigration, 129 

financial relations with Great 
Britain, 188 

food control, 223 

French investments in, 185 

imports and exports, 24 

population increase, 15, 15-n 

religions in, 4 

Triple Alliance, 42 

Tunis. 42 

Turkish War, 29, 46, 48, 49, 128- 
132, 139 

Venezuelan Boundary, 29-n 
Ito, Marquis, quoted, 86-n 



Jaffa-Jerusalem Railway, 168 
Jameson Raid, 29-n, 114 



260 



Index 



Japan 

agriculture, 25, 26 

British Alliance, 100 

British loans, 179, 180 

Chinese War, 46, 48, 49, 83-90 

civilization, early, 197 

finance, in Russian War, 179, 180 

foreign trade, 27 

French investments in, 185 

imports and exports, 24-27 

in Korea, 103, 104, 105 

opening of, 210 

press in, 89 

population, 17, 25 

religions in, 4 

Russian War, 46, 48, 96-105, 179, 
180 
Jenkins's Ear War, 1, 2 
Johannesburg Star, 113 
John, King of Abyssinia, 79 
Joint stock banks, English, 188, 189 
Julius Tower, 178 
Juntos, Cuban, 122 
Jute, 174, 224 
Juvenile courts, 199 

K 

Kabul, 51 

Kaiser Wilhelm II, 29-n, 115, 161, 

163, 209 
Kaufmann. General, 53 
Kavalla, 134 
Khartoum, 73, 74 
Khedive, see Ismail Pasha 
Khyber Pass, 51, 54, 55 
Kiao-Chau, seizure of, 91, 92 
Kiel Canal, 31 
Kirk Kilisse, 137 
Kitchener, Lord, 74, 75 
Kochana, atrocities at, 137 
Kodok (Fashoda), 74 
Koku, English equivalent, 25-n 
Konia, 161 
Korea 

area and crops, 83 

Chinese claims, 84 

economic difficulties in, 49 

imports and exports, 105 

internal reform, 86 

Japanese economic aims, 86, 87, 
87-n 

Japanese influx, 103, 104 

population, 103 

Russo-Japanese rivalry in, 96 

Tonghak troubles, 85 

trade, 104 

value to Japan, 83 
Koweit, British protectorate, 161, 
165 



Kowlung Peninsula, 90, 90-n 

Kriiger, President, 29-n, HI, 115 

Kriiger Telegram, 115 

Krupps, 7, 22 

Kuang-chan-wan, 89 

Kultur, British, 35 

Kultur, German, 6, 141 

Kuram Valley, 55 

Kuroki, General, 102 

Kuropatkin, General, quoted, 99-n 

Kiistenland, 175 

Kwang Chau, 92 

Kwangsi, 93 

Kwang Tung, 93, 100 



Lancashire, textile mills, 23 
Language, 9 

Latane, J. H., quoted, 29-n 
Lead, in Morocco, 154 
League of Nations 

Covenant of, 222, 228 

economic program, 221, 228 

economic union, 222-226 

Erzberger, Matthias, quoted, 226 

German protests, 226 
Leather, 224 

Lecky, W. E. H., on war causes, 3-n 
Legations in Pekin, 94 
Leutwein, Colonel Theodor, 126, 127 
de Lesseps, Ferdinand, 65 
Liao-Tung Peninsula, 87, 92, 102 
Lima, capture of, 63 
Linguistics, international conference 

on, 199 
Lippert dynamite concession, 111 
Liverpool, port of, 147, 168, 187 
Livingstone, David, 43 
Loans 

Egyptian, 66, 68 

French in Balkans, 139 

Japanese, 180 

Russian, 91, 180 

in World War, 181 
London, financial centre, 181—183, 

186, 188 
London Stock Exchange, 187 
Longwy, iron district, 152 
Lorraine, 147, 151 
Lule Burgas, 137 
Lumber, 220 
Lytton, Lord, 50, 53, 54, 55 

M 

Mahdists, 73, 75, 76 
Malgarejo, Dictator, 61 
Mauritius, 32 



Index 



261 



Martinovich, General, 136 

Macedonia, 41, 133, 136 

Madrid Stock Exchange, 186 

Majuba Hill, 108 

"Maine," U. S. S., 2 

Maize, 174 

Makela, Italian surrender at, 80 

Malta, 32, 34 

Manchuria, 93, 96, 101 

Mandatary Commission, 228 

Manchu Government, 93 

Manganese, 159, 160 

Mansampo, 99 

Man-power, in war, 177 

Marchand, Major, 74 

Margraf, Andreas Sigismund, 117-n 

Maritime Transport Council, 223, 

224 
Markets 

American, 120 

Austrian, 78, 135, 138, 172 

Balkan, 138 

British, 145, 148 

Cuban, 117, 118 

German, 138, 145, 214 

Italian, 132 

need of, 11, 12, 27 

Spanish, 119, 123 

struggle for, 140 

unliampered access to, 215 

war cause, 27 
Marseilles, 168 
Marx, Karl, 206 
Massacre, Afghan, 54 
Massacre, Turkish, 32 
Massachusetts, textile industry, 208 
Massowa, occupation of, 79 
Materiel, Serbian purchases, 172 
Maximilian, 29-n 
McKinlev, President, quoted, 122 
Meats, 224 
Mecca, 168 
Medicine, international conference 

on, 199 
Menelik of Shoa, 79, 80 
Merchant fleet, British, 167 
Metallurgy, international conference 

on, 199 
Metric Convention, 200 
Meuse River, 197 
Mexico 

American interests, 190 

French invasion, 29-n 

French investments in, 185 
Michnai Pass, 54 
Milan, King of Serbia, 77 
Mittel-Europa, 135, 158 
Missionaries, German, murdered, 91 
Molybdenum in Korea, 105 



Money, international, 185 
Monroe Doctrine, 29-n 
Monroe, President, 30 
Montenegro, 

economic problems, 133, 135, 136 

freedom of, 7 

war with Turkey, 133, 137 
Morocco 

Agadir incident, 12, 142, 149, 156, 
157, 191, 192, 193 

civil war in, 47 

commerce, 155 

Franco-German relations, 202, 209, 
211, 216, 219 

iron and minerals in, 154 

revolt of troops, 47 

trade percentages, 209 

Woolf, L. S., quoted, 217-n 
Moslems, 133 
Moussoul, 164 
Mugi, 26 
Munich, 168 
Munitions Council, 223, 224, 225 

N 

Napoleon, 5, 65, 117, 197 

Napoleon III, 29-n, 67, 191 

Natal, in Zulu War, 56 

Naumann, Friedrich, quoted, 145-n 

Naval bases, 28, 33, 34, 36, 45, 219 

Naval rivalry, Anglo-German, 150 

Near East, 12, 135, 193, 218, 226 

Nelson, 65 

Nepal, 35 

Netherlands Railway, 111, 116 

Neumann and Company, 112 

Neutrality, Belgian, 6 

Newsholme, A., quoted, 15-n 

New York, 187 

New York Herald, 43 

New York Stock Exchange, 186, 
187 

Neymarck, Alfred, quoted, 182-n 

Nicaragua, 28-n, 47 

Nile River, 66 

Nippon, see Japan 

Nitrates, 63, 224 

Nitrate War, 46, 48, 57-64, 139 

Nobel's Dynamite Trust, 111 

Non-ferrous metals, 224 

North German Lloyd, 147 

North Sea, 160 

Norway 
French investments in, 185 
grain imports, 212 
separation from Sweden, 7 

Novi-Bazar, Sanjak of, 4, 174 

Nubar Pasha, 66 



262 



Index 





Odessa, 169 

Oil, 33, 160, 224 

Oil cakes, 26, 27 

Okkium, Kun, 85 

Old Testament, religious wars in, 4 

Olympic games, 196 

Opium, 174 

Orange Free State, 109, 113, 115 

Oriental civilization, 197 

Origin of war, see War 

Ostend, 168 

Ottoman Empire, 130 

Overpopulation, see Population 



Paint, Bavarian, 149 

Palestine, 3 

Panama Canal, 27-n, 28-n 

Panama, Republic of, 28 

Pan-Slav policy, 134 

"Panther," German gunboat, 191 

Paper, 224 

Paris Bourse, 162, 184, 186, 191 

Paris Conference (1917), 224 

Paris, Treaty of, 102 

Passenger trade, British, 167 

Pathology, international conference 

on, 199 
Peace Conference, 141, 199 
Pekin, Relief Expedition, 90, 94, 95 
Pelly, Sir Louis, 53 
Penjdeh incident, 55 
Perim, 34 
Persia, 217-n, 219 

Persian Gulf, 35, 160, 162, 165, 166 
Peru 

guano, 57, 60 

Incas, 58 

nitrate of soda in, 69 

Nitrate war, 2, 57-64 

restrictions on nitrate, 60 

treaty with Bolivia, 61 
Pescadores, cession of, 87 
Petrograd Bourse, 186 
Petroleum, 174, 224 
Philip II, 190 
Philippines, 46, 47 
Philippopolis, Bulgarian occupation, 

77 _ 
Phoenicia, 14 
Phosphate beds, 59 
Picot, Battle of, 78 
Pigs as war cause, 1 
"Pig War," 136, 173, 213 
Ping Yang, Battle of, 86 
Plomenatz, 136 



Population 

American, 18 

birth rate, 15-18 

British, 17 

colonies, relation to, 15, 128-130, 
230 

death rate, 17 

French, 15-18, 140 

German, 15-18, 158 

increase of, 11, 14, 17 

Italian, 17, 79, 128-130 

Japanese, 18, 25, 27 

over-population, 18, 124 

stationary, 15 

surplus, 15, 230 
Port Arthur 

cession to Japan, 87 

fall of, 86 

importance, 88, 96, 99 

Japanese loss of, 89, 91 

Russian seizure, 90, 92 

siege of, 102 
Port Elizabeth, 111 
Port Lazarev, 99, 100 
Porto Rico, 27-n 
Portsmouth, Treaty of, 102 
Portugal 

African colonies, 111 

French investments in, 185 

military revolt in, 46 
Postal Union, 200 
Pound Egyptian, 70-n 
Poverty, British, 148 
Press, Japanese, 89 
Pressure, economic, 139 
Pressure, financial, 191-193 
Pro-Boer Party, 106 
Program Committee, 223, 224, 225 
Prostitution, international confer- 
ence on, 199 
Prussia 

War of 1864, 7 

Population, 15 
Psychic research, international con- 
ference on, 199 



Quetta, occupation of, 53 

R 

Radiology, international conference 

on, 199 
Railways, see Trans-Siberian, and 

Bagdad. 
Railways, international conference 

on, 199 
Rand, 107 



Index 



263 



Rassegna Nazionale, quoted, 129, 

130 
"Rattling the purse," 192 
Raw materials 

access to, 217 

Afghan War, relation to, 56 

American, 28 

British, 23 

Council, 223-225 

Egyptian, 64, 67 

French, 23, 24 

German, 22, 164 

industrial requirements, 11, 12, 
27 

Japanese, 104, 105 

Mittel-Europa, 159 

Tripolitan, 128 

Ukrainian, 159 
Red Sea, Italy on, 79 
Reichsbank, 178, 191 
Relief Expedition to Pekin, 90 
Religion, war cause, 3, 3-n, 4, 4-n 
"Revanche," 9, 143, 150, 153 
Revenge, war cause, 8 
Reventlow, Count von und zu, 

quoted, 144-n 
Rhine River, 197 
Rhodes, Cecil, 112, 113, 114 
Rhodesia Herald, 113 
Rice, 26, 27 
Risorgimento, 128 
Robinson, Albert G., quoted, 117-n, 

121-n 
Robinson Mines, 112 
Roman Empire, 11 
Romanoff dynasty, 3 
Rooke's Drift, 57 
Rothschild Exploration Company, 

112 
Rotterdam, port of, 158 
Rumania 

Balkan Wars, 133 

debt to France, 193 

freedom, 7 

grain and oil fields, 160 

trade with Austria, 174 
Rumelia, Eastern, 77 
Russia 

Agriculture, 39 

Anglo-Russian agreement, 35, 39 

Bagdad Railway, 169 

Balkan policy, 41, 134 

British relations, 50, 52 

Chinese demands, 91 

expansion in Asia, 32, 97 

finance, Japanese War, 179, 180 

French investments in, 184, 192 

German economic penetration, 
158 



Russia (continued) 
India, aggressions on, 35 
Japanese War, 46, 48, 96-105 
loan, to China, 91 
loans, from France and Germany, 

180 
religions in, 4 

Russo-Chinese Bank, 91 

Russo-Turkish War, 169 

S 

Saghalin, Russia in, 98, 99 

Saigon, capture of, 81 

Salisbury, Lord, 53 

Salonika, 134, 135, 137, 158 

Salonika-Monastir Railway, 170 

Santo Domingo, 47 

Sanjak of Novi-Bazar, see Novi- 

Bazar 
Sanmun, 94 

San Stefano, Treaty of, 40, 52, 77 
Sarajevo, 1, 142 

Saturday Review, quoted, 145-n 
Saxony, population, 18-n 
Scandinavia, Russian commerce 

with, 97 
Scheldt River, 197 
Scutari, 137, 138 
Sea, freedom of, 36, 215, 216 
Sea-power, 227 
Sebastopol, 169 

Seed-testing, international confer- 
ence on, 199 
Seligman, E. R. A., quoted, 123-n 
Senafe, Battle of, 79 
Seoul, Japanese population, 104 
Serbia 

access to sea, 173 

Austrian trade, 172 

Austrian War, 186 

Balkan Wars, 133, 137 

Bulgarian treaty, 134 

debt to France, 193 

economic independence, 136, 174 

freedom, 7 

irredentism, 173 

"Pig War," 1, 136, 173, 213 

religions in, 4 
Serbo-Bulgarian War, 46, 48, 76-78 
Seward, Secretary, 5 
Seychelles, 32, 35 

Shimonoseki, Treaty of, 86, 91, 101 
Shanghai, French rights in, 93 
Shantung, Germans in, 97 
Shantung, Japan in, 102 
Shere Ali, 53 
Shipping Council, 224 
Siam, Gulf of, 33 



264 



Index 



Siberia, wheat in, 83 

Sicilian Revolt, 46 

Sicily, 131 

Silk, 27 

Silver, in Morocco, 154 

Sivas, 169 

Skins, see Hides 

Skoda works, 172 

Skuptschina, Serbian, 173 

Slave trade, 198 

Slivnitza, 78, 173 

Smyrna-Kassaba Railway, 168 

Socialism, 184 

Societe du Chemin de Fer Ottoman 

d'Anatolie, 161 
Sokotra, 35 
Somaliland, 47 
Sontai, French attack on, 82 
South African Explosives Company, 

111 
South African War, see Boer War 
South America, 28, 29, 29-n 
Spain 

American War, 5, 46, 48, 116-123 

Armada, 190 

colonial administration, 118, 122 

French investments in, 184 

grain imports, 213 

iron, 152 

military revolt, 46 
Speare, Charles F., quoted, 182-n 
Stanley, Henry M., 43, 44 
Steel, 224 

Submarines, 22, 219, 220 
Sudan, 34, 49, 73, 191 
Suez Canal, 32, 34, 39, 40, 49, 64, 67, 

69, 72 
Suez, French investments in, 184 
Sugar, 21, 27, 117, 118, 174, 224 
Sulphur, in Morocco, 154 
Sultan of Turkey, 161 
Sweden 

iron, 152 

French investments in, 185 

grain imports, 212 

separation from Norway, 7 
Switzerland 

French investments in, 185 

grain imports, 212 
Syria, 164 



Tacna, 59, 64 
Tangier, 157 
Tanning materials, 225 
Tarapaca, 59, 62-64 
Tariffs, 123, 158, 200 
Tariff wars, 157 



Tashkand, 53 

Taurus Mountains, 162 

Taussig, F. W., quoted, 15-n 

Taxes, Boer, 113 

Taylor, Hannis, quoted, 120-n 

Tchataldja lines, 137 

Tea, 27 

Tei-lien-wai. 99 

Tel-el-Kebir, 72 

Testament, Old, religious wars in, 4 

Tewfik Pasha, 70 

Texas, Republic of, 1 

Textiles, 24, 147, 174, 199 

Thibet, 35, 47 

Thomas, Sidney Gilchrist, 44, 45, 

147, 152, 153 
Throne, speech from the, 213 
Tientsin, Treaty of, 85 
Tigris-Euphrates Vallev, 158, 159, 

164 
Timber, 224 
Tin, 224 

Tobacco, 118, 174, 224 
Tokio, Bank of, 180 
Tolzien, G., quoted, 145-n 
Tonghak movement, 85 
Tonkin, 82, 93 

Toronto Stock Exchange, 186 
Trade increase, 146, 147 
Trade routes, 30, 36, 45, 215, 216, 

218, 219, 227 
Transit, freedom of, 229 
Transport, 220, 223, 224 
Trans-Siberian Railway, 99, 100, 

169 
Transvaal, 29-n, 106, 107, 109, 111, 

115 
Trek, Great, 108 
Tribunaux Mixtes, 68, 69 
Trieste, 135, 158, 175 
Triple Alliance, 43 
Tripoli, 49, 80, 209 
Tsar of Russia, 40, 91, 162 
Tsingtao, 89, 97 
Tsushima, Straits of, 99 
Turkestan, Russians in, 46 
Turkey 

Bagdad Railway, 163, 166, 169 

Balkan policy, 133 

delay of 6th Army Corps, 169 

French investments in, 184 

Greek War, 46, 48, 123-126 

Italian War, 46, 48, 128-132 

Macedonia, 41 

Mittel-Europa, 158, 160 

religions in, 4 

Russian War, 40 

tobacco in, 118, 174 

Tripolitan interests, 49 



Index 



265 



Tungsten, Korean, 105 
Tunis, 42, 129, 130 

U 

Uitlanders, 108, 109, 110, 114 
Ukraine, raw materials in, 159 
Undeveloped lands, menace of, 216 
Unemployment, German, 149 
Unification, national, 6, 7 
Union, international economic, 222- 

226 
United Kingdom, see Great Britain 
United States 

British investments in, 184 

Capitulations, 68 

Food Control, 225 

foreign investments, 185, 190 

French investments in, 185 

imperialism, 27, 27-n 

internal rivalry, 208 

investments in South America, 
189, 190 

loans to Germany, 192 

population, 18, 27 

Spanish War, 116-123 



Vassos, Colonel, 125 
Venezuela, 29-n, 46 
Vienna, 1, 168 
Vienna Bourse, 186 
Vilmorin, Louis, 117, 117-n 
Virgin Islands, 28-n 
Vladivostok, 39, 97, 98, 99, 209 

W 

Wakamatsu Steel Works, 105 
Wales, population, 15-n 
War 

"altruistic," 5, 6 

armaments, 9, 177 

causes, 1-14 

causes, list of, 3, 4 



War (continued) 

dynastic, 4 

economic motives of, 11, 45, 63, 
64, 76, 77, 80, 83, 86-n, 87, 91, 
96, 103, 107, 123, 124, 128, 135, 
138-140, 143, 150, 175, 176, 204 

finance, 10, 177-180, 185-189, 194, 
195 

food in war, 177 

hatred as cause, 10 

inventions in, 221 

language, 9 

man-power in, 177 

prevention of, 190-192, 194 

religion in, 4 

unification, national, 7 
Wei-hai-wei, 86, 90 
Wells, H. G., quoted, 146 
Wernher, Beit and Company, 112 
Westphalian coal, 152, 156 
Westphalian manufactures, 149 
Weyler, General, 121 
Wheat, 21, 26, 159, 224 
White man's burden, 6 
Wilhelm II, see Kaiser Wilhelm 
Wilson Bill, 119 
Wolseley, Lord, 72, 109 
Wool, 21, 24, 26, 174, 220, 224, 225 
Woolf, L. S., quoted, 217-n 



Yalu, Battle of the, 86 

Yalu River, 101, 216 

Yangtse Valley, 92, 216 

Yellow Sea, Russian interests in, 98 

Young Turks, 130, 131 

Yunnan, 93 



Z 



Zambesi River, 114 
Zanzibar, bombardment of, 46 
Zollverein, German, 159 
Zulu War, 46, 48, 56, 139 



